Just In : PenCom recovers N12.5bn in penalties

From the inception of these recovery agents programmes in 2012 to 31 December 2023, the principal contributions that were recovered were about N12.9 billion while the penalty was about N12.5 billion.

To uphold pension compliance standards, the National Pension Commission (PenCom) said it has so far recovered N12.5 billion in penalties from employers who failed to remit pension contributions.

The sum was collected by recovery agents, companies engaged by the commission to recover outstanding pension contributions with interest penalty from defaulting employers within a specified timeframe and under agreed terms and conditions.

This was disclosed Monday by the commission’s spokesperson, Ibrahim Buwai.

He said approximately N12.9 billion in principal contributions and N12.5 billion in penalties have been recovered from non-compliant employers since the inception of PenCom’s recovery agents programme in 2012.

“From the inception of these recovery agents programmes in 2012 to 31 December 2023, the principal contributions that were recovered were about N12.9 billion while the penalty was about N12.5 billion.

“So, you can see that it’s almost 50-50. All this is what has been recovered from employers and paid into Retirement Savings Accounts,”
He explained that no portion of the recovered funds goes to Pension Fund Administrators (PFAs), PenCom, or any other entity. Instead, they are exclusively allocated to RSA holders to bolster their retirement savings.

Mr Buwai warned employers that it is in their best interest to remit contributions promptly, as failing to do so incurs penalties and ultimately costs more than complying with remittance regulations.

Micro pension
Mr Buwai said despite efforts to raise awareness about the micro pension plan through media campaigns, trade fairs, and roadshows, it still has a long way to go.

The micro pension plan aims to provide a savings avenue for individuals in the informal sector and trades not typically covered by traditional pension schemes, such as artisans or self-employed professionals.

According to him, since the inception of the micro pension plan, around 100,000 RSAs have been opened, with contributions totalling just over N500 million.

“That is to tell you that there is still a long way to go. But what we can do on our part is just to continue to enlighten people, to show them that the micro pension plan recognizes the level of the participants. It has been designed to take care of the peculiarity of that sector,” he said.

Unlike mandatory contributory pension schemes, the micro pension plan allows for flexible withdrawals, with 40 per cent of contributions available for contingencies.

It encourages individuals to save for the future, emphasizing the potential growth of even small contributions over time.