Pension Contributions: Recovery Agents Visit 5,584 Defaulters

20 Feb 2013

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Mr. Dave Uduanu, President of the Association of Pension Fund Operators

Nnamdi Duru

Making good its promise to recover all the pension contributions of workers being withheld by their respective employers across the country, the 172 Recovery Agents engaged by the National Pension Commission (PenCom) have visited 5,584 recalcitrant employers.

The President of the Association of Pension Fund Operators (PenOp), Mr. Dave Uduanu, confirmed this in Lagos recently.

Section 11.7 of the Pension Reform Act, 2004, provides that: “Any employer who fails to remit the contributions within the time prescribed in subsection (5) (b) of this section shall in addition to making the remittance already due be liable to a penalty to be stipulated by the commission provided that the penalty shall not be less than 2 per cent of the total contribution that remains unpaid for each month or part of each month the default continues and the amount of the penalty shall be recoverable as a debt owing to the employees retirement savings account as the case may be.”

Consequently, the commission licensed 150 recovery agents who will be responsible for recovering outstanding pension contributions from defaulting employers together with interest penalty in favour of the employees.

Giving an update on the activities of the recovery agents, Uduanu said that only 105 defaulters out of the estimated 15,000 defaulters have been able to remit withheld pension contributions as required of them under the law.

“Recovery Agents recently appointed by PenCom to go after companies and organisation that have failed to remit employee contributions to Pension Fund Administrators (PFAs) have achieved a lot of progress in the recovery of outstanding contributions and interest penalties from defaulting employers.

“The recovery agents have visited over 5,584 firms out of 15,750 firms identified as non-compliant with the law and the amounts so far recovered are from 105 of these firms,” Uduanu said.

PenCom published the names of defaulting employers in some Nigerian newspapers under its sanction regime of “naming and shaming” in 2011. It commenced the recovery of outstanding pension contributions together with interest from defaulting organisations in line with provisions of the pension law in January last year.

It threatened to drag defaulting employers who fail to cooperate with the recovery agents and remit the deducted pension contributions to court.

The job of recovery agents include serving demand letters to defaulting employers, requesting for payment and reconciling outstanding pension contributions and interest penalty with defaulting employers.

They are also to compute interest penalty in line with the pension law, follow-up with the defaulting employers to ensure and obtain evidence of remittance of outstanding pension contributions and interest penalties as well as instituting legal actions against stubborn employers and submit progress report on individual employers to the commission.

Relating its experience in this regard, the commission said “truly some of them came forward to regularise their accounts, some of them that have not been able to do that but some others said they have closed shops and were no longer in business.”

Tags: Business, Nigeria, Featured, NSE, Pension Contributions, Visit 5, 584 Defaulters, PENCOM

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