36 Employers paid N577 million Penalty for late Remittance of Pension Contribution

April 13, 2022 PensionNigeria

The National Pension Commission (PenCom) has disclosed in its quarterly report for 4th quarter 2021 that 36 employers paid N577,874,127.55 as penalty for late remittance of pension contribution during the quarter.

PenCom giving update on the recovery of outstanding pension contributions and penalties from defaulting employers said it issued demand notices to defaulting employers whose pension liabilities were established by the Recovery Agents (RAs).

The sum of N984,295,614.20 representing principal contribution N406,421,486.65 and penalty N577,874,127.55 was recovered from 36 defaulting employers during the quarter under review.

PenCom further disclosed that it has also recommended appropriate legal action for 18 defaulting employers who are yet to pay their outstanding pension contributions and penalty for late remittance.

Recovery Agents

A recovery agent is any company engaged by PenCom to recover outstanding pension contributions with interest penalty from defaulting employers within a specified timeframe and under agreed terms and conditions.

Defaulting Employer

A defaulting employer is an employer who has defaulted in the remittance of pension contributions either for non remittance, incomplete remittance or late remittance.

Non remittance

Where an employer fails to deduct and or fails to remit pension contributions for its employees.

Incomplete Remittance

The percentage for the pension contribution is a minimum of 8% by employee and minimum of 10% by employer, the percentages are to be applied to the employee’s monthly emolument which must not be lower than the employee Basic salary, transport and housing allowance.

Late Remittance

Employers are required to deduct at source the pension contributions of their employees, and within 7 working days after the payment of salary, remit same to the Pension Fund Custodian (PFC) of the employees’ Pension Fund Administrator (PFA).

Penalty

Any employer who fails to deduct or remit pension contributions within 7 working days after payment of salary, shall, in addition to making the remittance already due, be liable to a penalty to be stipulated by PenCom from time to time, but the penalty shall not be less than 2% of the total contribution that remains unpaid for each month or part of each month the default continues and the amount of the penalty shall be recoverable as a debt owed to the employee’s retirement savings account.

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Check below for PensionNigeria breakdown of all the important aspects of the PenCom 4th Quarter 2022 Report

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DONT MISS PenCom 4th Quarter 2021 Report Series

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