Regardless of as much as N15 billion in financial sanctions imposed on employers within the personal sector for non-remittance of pension contributions of their workers, state governments and firms are nonetheless shunning pension remittance, LEADERSHIP has learnt.
Because the graduation of the debt restoration initiative in June 2012, as much as 31 March 2025, the Nationwide Pension Fee (PenCom) has disclosed {that a} complete of N29.65 billion has been recovered, consisting of N14.86 billion in principal contributions and N14.79 billion in penalties.
Half 2, Part 4 of the Pension Reforms Act (PRA) 2014 states that the Contribution for any worker to whom this Act applies shall be made within the following charges regarding his month-to-month emoluments-(a) a minimal of 10 per cent by the employer, and (b) a minimal of eight per cent by the worker.
Whereas an eight per cent contribution due from an worker could be deducted from his wage by his employer and remitted alongside the corporate’s 10 per cent, making a cumulative 18 per cent to the RSA of the employee, most employers at the moment are circumventing this provision
In Q1, 2025, a complete of N1.35 billion was recovered from 19 defaulting employers, comprising N972.12 million in excellent contributions and N381.88 million in penalties, and 12 persistently non-compliant employers had been referred to the fee’s Authorized Division for prosecution.
Though PenCom has made it a matter of obligation to current pension compliance certificates yearly to compliant organisations, in order that they will bid for presidency contracts, this has not deterred corporations from failing to remit as and when due.
In consequence, PenCom, along side the Nationwide Insurance coverage Fee (NAICOM) is now taking a harder stance to extend compliance on remittance.
PenCom and NAICOM have collectively issued a directive compelling insurance coverage corporations and their distributors to completely adjust to Nigeria’s pension and insurance coverage legal guidelines, particularly within the space of pension contributions as and when due.
The brand new directive, contained in a Joint Round signed by the director of the Surveillance Division at PenCom, Abdulrahaman Muhammad Saleem and the director of Authorized, Enforcement and Market Improvement at NAICOM, Dr Talmiz Usman, was meant to strengthen compliance with the Pension Reform Act (PRA) 2014 and the Nigerian Insurance coverage Trade Reform Act (NIIRA) 2025.
The round targeted on compliance with the CPS and the requirement for all employers to take care of Group Life Assurance (GLA) protection for his or her workers.
Below Part 2 of the PRA 2014, each employer in the private and non-private sectors is required to take part within the CPS, remit pension deductions inside seven working days after wage fee, and supply life insurance coverage protection for workers.
Nevertheless, regardless of steady engagements, audits, and sanctions by PenCom, a major variety of employers, together with some throughout the monetary providers trade, have remained in breach of those authorized obligations.
PenCom has appointed Restoration Brokers to audit defaulting employers, impose administrative sanctions, and pursue judicial restoration of excellent pension contributions and penalties.
But, the persistence of non-compliance has continued to threaten the sustainability and credibility of the CPS, prompting this joint enforcement technique with NAICOM.
By this new round, going ahead, all Licensed Insurance coverage Corporations (LICs) are anticipated to own legitimate Pension Clearance Certificates (PCCs) from PenCom and Group Life Assurance Certificates compliant with NIIRA 2025 earlier than participating in any operational or funding exercise.
Each vendor, service supplier, and counterparty that seeks to do enterprise with insurance coverage corporations should additionally maintain legitimate PCCs and GLA Certificates as a precondition for any contractual settlement, the regulators disclosed.
The administrators of each regulators additionally lengthen this directive to funding transactions, together with business papers, bond issuances, and financial institution placements.
“All counterparties concerned should execute a Compliance Attestation, affirming that their very own distributors and repair suppliers additionally keep legitimate PCCs and GLA Certificates.
“This cascading requirement successfully embeds pension and insurance coverage compliance all through the funding worth chain, guaranteeing that no entity throughout the insurance coverage ecosystem operates exterior the legislation, ” they identified.
Insurance coverage corporations are additionally required to combine these compliance necessities into their inside insurance policies, vendor choice processes, due diligence procedures, and funding threat evaluation frameworks.
Equally, dad or mum corporations, subsidiaries, holding corporations, and institutional shareholders of insurance coverage entities should show full compliance earlier than any enterprise dealings are authorized.
Recognising the operational changes that the brand new measures demand, PenCom and NAICOM have granted a six-month transition window from the date of the round to allow full implementation.
