About 1,973 private sector institutions that failed to comply with the Pension Reform Act 2014 have lost the opportunity to participate in Federal Government businesses and contracts in the current year.
The institutions were refused pension compliance certificate by the National Pension Commission (PenCom) due to non-remittance of pension contributions for the appropriate period and/or non-provision of group life insurance policy for their employees.
This follows an agreement PenCom reached with Bureau of Public Enterprises (BPE), Bureau of Public Procurement (BPP), and ministries, departments and agencies of government as part of efforts to deepen compliance with the pension law.
According to PenCom, during the first quarter of 2019, the Commission received 6,630 applications for the issuance of compliance certificate out of which 4,657 certificates were issued, while 1,973 applications were declined.
The Commission in the first quarter report stated that the sum of N45.90 billion was remitted to 105,382 employees’ Retirement Savings Accounts (RSAs) by the 4,675 organisations that were issued with compliance certificates.
Susan Oranye, executive secretary, Pension Fund Operators Association of Nigeria (PenOp), said compliance among employers and actual remittance were critical for the continued sustenance of the scheme.
Oranye said it was rather unfortunate that some employers that have three employees and above have not thought it wise to embrace the scheme for the benefit of their employees and their organisation. Compliance, she said, not only enhances employees’ commitment to duty and increased productivity but also opens door for the institutions to partake in government contracts.
“I believe that for the benefit of the citizens, the workers, and the economy as a whole, those in authority – BPE, the Bureau of Public Procurement and even the ministries, parastatals and agencies – should insist on compliance with the Pension Act as a precondition to participate in government contracts, irrespective of the size and nature,” she said.
To enhance compliance with provisions of the Pension Reform Act in respect of group life insurance and contribution remittances, PenCom in February 2019, in an advertorial titled ‘Notice to All Employees on Their Rights to Life Insurance Policy and Pension Contributions’, charged workers to demand for their rights.
“This is to remind all employees in the public service of the federation, Federal Capital Territory and States that have implemented the Contributory Pension Scheme as well as private sector, that it is their rights, under section 4(5) of the PRA 2014, to have life insurance policy taken on their behalf by their employers for an insured amount not less than three (3) times their annual total emolument,” the advertorial read.
“Please note that employees are also required to ensure that all pension contributions deducted from salaries and/ or contributed by employers are remitted to the Pension Fund Custodian (PFC) by the employer not later than seven working days from the date of payment of their salaries,” it read.
The Commission advised employees to report to the Commission where the employer fails to procure the minimum required life insurance policy in their favour, submit the evidence of compliance with life insurance policy to the Commission and place the certificate in a conspicuous place within the organisation, and remit the deducted pension contributions into their Retirement Savings Accounts.
In accordance with the provisions of Section 4(5) of the Pension Reform Act (PRA) 2014 and Section 5.5 of the Guidelines for Insurance Policy for Employees, employers of labour covered by the PRA 2014 are required to submit copies of the insurance certificate with the schedule of benefits to the PenCom.
The insurance certificate should state that all employees are covered up to an amount not less than three times their respective annual total emoluments (ATE).
Employers that have not yet submitted copies of insurance certificate to the Commission were advised to do so before March 31 each year, failing which PenCom would consider such employers in default of Section 4(5) of the Pension Reform Act (PRA) 2014.
Source: businessdayng
