CPS: PenCom Drags Non -remitting Employers to Court

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Ebere Nwoji

The National Pension Commission, (PenCom) said it has dragged about 243 employers who failed to remit outstanding pension contributions of their employees under the Contributory Pension Scheme (CPS) as at 2014 to Court.

The commission said penalties have been established against the employers, adding that they are now at different stages of prosecution at the National Industrial Court.
The commission disclosed this in a memorandum it submitted to the House Committee on Pensions.

It said it has approached the Economic and Financial Crimes Commission (EFCC) to prosecute employers that victimise employees for blowing whistle on non-remittances of their pension contributions.
PenCom, also said it has been informed about a worrisome development where companies deducting pension contributions from the emoluments of their employees and not remitting same.

“The employees often initiate investigations into the pension liabilities of companies by way of complaints. However, instances abound where complaints of this nature gravely expose the employee to loss of job and an ultimate price for whistle blowing on ground of the perpetuated illegalities of their employers.

“The Commission views this as a financial crime and has accordingly approached the EFCC to collaborate with it to address this situation.”
The Commission noted that employers that fail to remit outstanding pension contributions and established penalties are further approached for civil compliance through administrative mechanisms as set out in the Regime of Sanctions of the Commission, adding that the sanction regime include and are not limited to the issuance of demand letters, letters of warnings, letters of caution and outright sanctions.

In the memorandum, PenCom said on its part, its efforts at recovery are not without unpleasant experiences, stressing that there abound situations where officers of the Commission and the Recovery Agents are accosted with hostility in the conduct of their assignments.

It noted that oftentimes, its officers are not assisted with relevant information and that attempts to directly intervene often elicit no responses until litigation is commenced.
“Some organisations often insinuate grand collusion to defraud them of the determined sums meant for their employees. Some of the organisations lay claim to alleged witch-hunt when prosecuted for non-compliance,” it added.

It noted that the obligation for the remittance of pension contributions under the CPS is provided under Section 11 of the PRA, 2014., adding the Act mandates the employer to deduct at source, the monthly contribution of the employee not later than seven days from the day of payment of his salary and remit same to the Pension Fund Custodian (PFC) specified by the employee’s Pension Fund Administrator (PFA).

PenCom in the memorandum quoted portion of the Pension Reform Act on remittances as saying that: “Non-remittance of the contribution as and when due attracts penalty to be stipulated by the Commission as enshrined under Section 11(6)&(7) and Section 24(d) of the PRA 2014. The penalty shall not be less than 2% of the unpaid contribution and is recoverable as a debt.”
The Commission further said Section 18(a) of the PRA, 2014 gives it the power to enforce and administer the provisions of the Act.

“This statutory provision also empowers the Commission to co-ordinate and enforce all other laws on pension and retirement benefits while ensuring the effective administration of pension matters. The functions of the Commission under Section 23 of the PRA 2014 include the maintenance of data bank on pension matters and investigation and mitigation of complaints. Section 24(g) thereof further gives the Commission the powers to impose administrative or civil sanctions or fines on erring employers or operators. The PRA also confer the right to request information from any employer on the pension matters,” it sated.

It insisted that the combined effect of these sections grants the Commission powers to ensure compliance with the PRA under which the CPS was established.