Wednesday, 3 February 2016
PenCom Recovers N10b Pension Contribution.
The National Pension Commission (PenCom) has recovered over N10 billion unremitted pension contributions in principal and interest penalty, The Nation has learnt.
It was also learnt that the Commission would soon begin pension audit of the books of over 200,000 existing employers in the country to determine those who failed to remit the mandatory 18 per cent pension contributions of workers to their Retirement Savings Account held by their respective Pension Fund Administrators (PFAs).
PenCom Head, Compliance and Enforcement, Alhaji Umar in an interview with The Nation, said the commission decided to set up the pension audit system to complement its ongoing processes of ensuring compliance by employers in the country.
The processes according to him, include engaging employers through warning letters, imposing two per cent monetary penalty on unremitted contributions, naming and shaming of erring employers and seeking litigation against them.
Umar disclosed that the commission will engage accountants and other professionals who have worked in regulatory or banking sector to carry out pension audit on the books of organisations.
This, he said, will be done on a frequency of three to four years. He said: “We are still following through our process of compliance starting from engaging employers through warning letters, imposing two per cent monetary penalty on unremitted contributions, naming and shaming of erring employers and seeking litigation against them. This is the process we follow for any employer we find not to be complying with the provision of the Pension Reform Act. The Act provides for a two per cent increase penalty for late remittance.
“Part of our processes of enforcing compliance is the appointment of recovery agents to recover unremitted pension contribution from the private sector. The agents mostly lawyers and accountants do a pension review of employer’s compliance level and where they find that they are not complying fully, they determine the outstanding in terms of principal contribution and also penalty as the act provides for. Presently, we are in the process of writing some employers letters. Some are at the level of receiving warning letters, some at the level of imposing monetary penalty while we drag some to the court.
He added:’’From our database, we have over 200,000 employers and some are portfolio employers. Based on our pension submission framework, PFAs render returns on monthly basis and they tell us who is remitting and who is not remitting contributions. We have consolidated that and we have number of those that are not remitting.
On the need for pension audit he said:“Presently, we are planning on pension audit on yearly basis. Auditors will specifically carry out a pension audit on the accounts of companies in terms of pension compliance. Any employer who has not remitted for a period will be identified and will be made to pay the penalty. The numbers are huge and it will take time to go round all of them.
He spoke about plans to make the audit frequent saying: “We are planning of making the frequency of the audit to be between three or four years. This is because we are dealing with over 200,000 employers and to audit them every year will be to audit 200,000 companies. This will not be possible because even Nigeria does not have the capacity in terms of available accountants or professionals who have worked in regulatory or banking.
“Despite these challenge, there is also the issue of cost because you have to pay them to do the work. So we say assuming we audit them in batches per annum on a frequency of three or four years which means that we will come back to each company around this period.
‘’We also receive complaint or request to investigate some companies and we invite anti-corruption agencies like the Economic and Financial Crimes Agency, Independent Corrupt Practices Commission and the Code of Conduct Tribunal. THE NATION