…As Nigeria’s RSA Rise To Over N12.3 Trillion
The National Pension Commission, PENCOM is deeply concerned over plight of Pensioners not being able to access their money after retirement on account of non remittance of their Pension Contributions by their employers.
This is coming as Nigeria successfully grew its Retirement Savings Account, RSA, to about N12.3 trillion as at December 2020 from N10.8 trillion in July same year.
Even with this lofty achievement, the PENCOM, has asked Pension Contributors to be watchful and report any infractions by employers regarding remittance of contributions to Pension Fund Administrators.
The Commission, said this in a mailed statement on Tuesday, in which it states that Section 3, sub section (1) of the Pension Reform Act 2014 states that Nigerian employers with up to three employees in their business should arrange for pension package for the employees under the CPS for payment of retirement benefits to the employees.
The law requires that employees should choose a pension fund manager of their choice and open a Retirement Savings Account where his or her employer should on monthly basis pay in 18 per cent of his salary contributed by the employer and the worker at the rate of 10 per cent for the employer and eight per cent for the worker.
Section 4 subsection (1) of the Act states that the contribution for any employee shall be a minimum of 10 per cent by the employer and a minimum of eight per cent by the employee.
Section 11 subsection (1) states that every employee shall maintain a Retirement Savings Account (RSA) in his name with any PFA of his choice.
The law also states that the employer shall deduct at source the monthly contribution of the employee; and not later than seven working days from the day the employee is paid his salary; remit an amount comprising the employee’s contribution and the employer’s contribution to the Pension Fund Custodian specified by the PFA of the employee.
Despite these laws, Nigerian employers deduct their employees’ part of the contribution and fail to remit it.
Cases of workers who retire under the CPS and fail to access their retirement benefits abound, it said.
This is because for such workers, their employers have not been remitting their contributions and they failed to monitor the status of their contributions.
The Commission who said non remittance of employee’s contribution was a breach of its extant laws enjoined contributors to report such.
Pencom said, “Confirm that your employee is making complete monthly remittances to your retirement Savings Account i.e. both employer and employee portions. Report non- remittance of your monthly pension contributions to the National Pensions Commission.”
The Commission advised employees to verify that their employers have subscribed to a Group Life Insurance policy for them, adding that they should ensure the premium was being paid annually which must be consistent with relevant laws.
Further describing the role of the pension contributor, the commission pointed out the need for contributors to ensure they do not open more than one Retirement Saving Account.
The pension regulator also called on contributors to ensure that they receive quarterly statements of their Retirement Savings Account from their subscribed PFA.
Pencom added, “Review your Retirement Savings Account statement to check the performance of the fund.”