As recovery agents rake in N335.84m, N31.04m penalty

BY VICTOR AHIUMA-YOUNG

NATIONAL Pension Commission, PenCom, has now concluded plans to prosecute private sector employers for breaching the Pension Reform Act, PRA, 2004 especially in relation to remittance of deducted pension contributions into the Contributory Pension Scheme, CPS.

Pension & You gathered that by  the end of 2013, it was uncovered that 335 private sector employers  failed to remit about  N13.33 billion to the Retirement Saving Accounts,  RSAs, of contributors (workers), besides interest accruing  on  the amount.

However, the Recovery Agents, RAs, engaged by PenCom have so far recovered  about  N335.84 million as well as N31.04 milion paid by affected defaulting employers  as penalty.

It would be recalled  that as part of the initiatives to recover un-remitted pension contributions from private sector employers along with interest penalty, 173 interested accounting and legal firms were engaged as Recovery Agents, RAs, for the exercise by PenCom.

Based on the review of the returns forwarded by the RAs to the Commission, it was established that 15,427 employers failed to remit pension contributions to their employees’ RSAs for various periods between January 2010 and December 2011.

Subsequently, the defaulting employers were distributed among the RAs to recover the outstanding contributions.

According to the update on Pension Industry by PenCom, “As at the end of September 2013, RAs established outstanding pension contributions and interest penalties, which amounted to N13.33 billion against 335 private sector employers. Approval was granted by PenCom for the RAs to serve demand notices to the affected employers, which resulted in the recovery of N335.84 million and an interest penalty of N31.04 million as at end of September 2013.

In furtherance of its compliance efforts, the Commission intends to commence the issuance of notice of intention to prosecute the employers that failed to remit the outstanding pension contributions and interest penalty.”

According to information, “as at 30 September, 2013, the total registration stood at 5.83 million with the public (comprising federal and state government employees) and the private sectors accounting for 2.95 million (50.55%) and 2.88 million (49.45%) respectively.”

Remittance of FGN Employees into RSAs: According to the update, “the total pension contributions so far released by the Office of the Accountant-General of the Federation, OAGF, amounted to N805.52 billion out of which the sum of N767.65 billion had been remitted to Pension Fund Administrators, PFAs, covering the pension contributions paid into 914,050 RSAs (including retirees and deceased) of employees of Treasury Funded FGN ministries, departments and agencies, MDAs, from inception to August, 2013. The disbursements were done by the Central Bank of Nigeria, CBN, after due verification of contributors’ documentary evidences by PenCom.”

Determination, redemption of accrued rights of FGN retirees:
“The Federal Government had transferred the total sum of N406.21 billion into the Retirement Benefit Bond Redemption Fund Account, RBBRFA, kept and managed by the CBN between June 2004 and September 2013. In addition, PenCom had advised the CBN to release the sum of N402.39 billion into 76,782 RSAs of retirees/deceased employees of the FGN.

“The CPS continues to ensure that retirees receive their benefits as and when due. Thus, apart from collecting pension benefits through Programmed Withdrawals and Life Annuities as provided by the PRA 2004, retirees also made lump sum withdrawals from their RSAs at retirement. In addition, in the case of death in active service, the Next of Kin or the beneficiary of the deceased RSA holder is entitled to group life insurance benefit, which is three times the total annual emolument of the deceased employee.

Transfer of NSITF contributions to members’ RSAs
On the transfer of the Nigeria Social Insurance Trust Fund, NSITF, members’ RSAs, the update said “by the end of September, 2013, PenCom had reviewed and approved the transfer of N8.11 billion out of the N64.61 billion assets of the NSITF for 107,695 contributors.

In addition, approval had been granted to Trustfund Pensions Plc to transfer the sum of N1.27 billion into the RSAs of 17,483 members who contributed to the former National Provident Fund, NPF/NSITF Pension Scheme. Furthermore, total pension payments of N5.53 billion had been paid in respect of 6,426 pensioners of NSITF as at September, 2013.”

Pension fund assets: The total value of pension assets under the CPS stood at N3.73 trillion as at September, 2013 with an average monthly contribution of N20 billion and 30% annual growth rate, according to the update.

“This pool of pension funds is a potential platform for attaining the transformation agenda of Government in the provision of infrastructure, energy, employment generation and the development of the real sector.