10042019 - Politicians, traditional rulers aiding bandits — DEFENCE MINISTER


38 Vanguard, WEDNESDAY, APRIL 10, 2019

Verification: Lamentation as Airways

Pensioners no sleep at center

By Victor Ahiuma-Young & Monsuru



How we're tackling non-remittance of pension

fund ----PenCom boss

By Victor Young

ONE of the major challenges

facing the Contributory

Pension Scheme,

CPS, is the issue of poor remittance

by private sector

employers. In this interview

with the Acting Director-General

of the National Pension

Commission, PenCom, Mrs.

Aisha Dahir-Umar, she

gives insight into how the

commission is addressing the

challenge, among other issues.


The level of remittances by private

sector employers has been

a major drawback to the CPS.

How are you addressing it and

what have been achieved and the


The Commission has developed

a Framework for Compliance

with the provisions of the

Pension Reform Act, PRA, 2014.

The Framework outlines the strategies

being adopted to drive compliance.

The strategies include

the appointment of consultants

to review the pension records and

recover unremitted pension contributions

and penalties from defaulting

private sector employers.

Other strategies are the issuance

of Pension Clearance Certificates,

Complaints Resolution and Monitoring

of Compliance through

onsite inspection of employers,

Public Awareness, Engagement

and Collaboration with social

partners and relevant stakeholders.

The implementation of these

strategies has improved the level

of remittances of pension contributions

by the private sector

employers. The appointment of

Recovery Agents, RAs, to recover

unremitted pension contributions

plus penalty has been largely

successful. It has boosted the

confidence of contributors and

encouraged non-participating

employers to embrace the

scheme. Through this initiative,

the Commission has recovered

N15.53 billion comprising principal

contribution N7.99 billion)

and penalty (N7.54 billion) from

defaulting employers. The penalty

is remitted to the employees

Retirement Savings Accounts,

RSAs, to compensate for the income

that would have been

earned if the contributions were

remitted as and when due.

The Commission issues Pension

Clearance Certificates,

PCCs, to private sector employers

with three or more employees.

The PCCs are renewed on

yearly basis. Through this initiative,

the Commission has ensured

the remittance of N124.6

billion from 16,536 private sector

organisations who applied for the

certificate in 2018.

Furthermore, the Commission

drives compliance by private sector

employers through public

awareness campaigns and engagement.

This initiative aims at

educating employees/employers

and expanding the coverage of

the Contributory Pension

Scheme. In addition, the Commission

monitors compliance

through onsite inspections to

ensure that employees of private

sector organisations open Retirement

Savings Accounts, RSAs

and pension contributions are remitted

as and when due.

Meanwhile, in a bid to ensure

compliance with the CPS, the

Department had faced challenges.

Some of these challenges include:

Reluctance of some employers

to remit pension deductions

due to perceived increased

personnel cost; Non or irregular

funding of RSAs by private sector

employers as a result of weak

business environment; Absence

of a comprehensive database of

private sector employers and

their accurate addresses. So far,

the Commission has relied mainly

on information provided by

complainants and returns rendered

by operators for data on

Reluctance to

establish necessary


to drive implementation


the reform in

many states has

contributed to

the poor compliance


defaulting employers.

*Mrs Aisha Dahir-Umar- Acting DG, PenCom

It is being insinuated that Pen-

Com is afraid to take on the

media believed to be the most

recalcirant in private sector,

thereby endangering the retirement

life of staff of these organisations.

What is your response?

The Commission engages defaulting

employers, including

media organisations, on non-remittance

of pension contributions

and penalty in line with its Regime

of Sanctions. Furthermore,

the Commission had also appointed

RAs to review the pension

records of employers and

determine their level of compliance

with the provisions of the

PRA 2014.

So far, the Commission has

identified and assigned 20 defaulting

media organisations to

the RAs. To date, the sum of

N238.19 million has been recovered

from 11 of the media organisations

as three of them have

fully settled their outstanding

pension liabilities while eight

made partial remittance of their

established pension liability. Furthermore,

12 media organisations

(inclusive of some who have

made partial remittance) are being

prosecuted by the Commission

on non-remittance of pension


In addition, we urge employees

in the media sector to report

cases of non-remittance of pension

contributions to the Commission.

Is the Federal Government up

to date with remittance in the

core civil service and parastatals?

The pension contributions of

permanent employees of the

Federal Government of Nigeria

under the treasury funded Ministries,

Departments and Agencies,

MDAs, are deducted regularly

at source by Budget Office

of the Federation, BOF,/Office of

the Accountant-General of the

Federation, OAGF, and credited

to the Contributory Pension Account

at Central Bank of Nigeria.

Thereafter, the Commission

remits the pension contributions

of such employees from the CPA

into their respective Retirement

Savings Accounts, RSAs, with

Pension Fund Administrators,


The Federal Government of

Nigeria through the BOF has

continued to promptly deduct

and release pension contributions

to the Contributory Pension

Account, CPA, domiciled with

Central Bank of Nigeria for onward

remittance into the employees’

RSAs. In essence, the FGN

has been up to date with the remittance

of Pension contributions

for the core Civil Service and


What is the status of implementation

by state governments?

Pursuant to the enactment of the

Pension Reform Act, PRA 2014

which mandated the participation

of employees of the public service

of the Federal Capital Territory,

States and Local Governments as

well as the private Sector in the

contributory Pension Scheme, the

National Pension Commission

(the Commission) has consistently

been engaging various state

governments, trade unions, relevant

stakeholders and the general

public on the full benefits of the

CPS with a view to bringing them

to full implementation of the


This pursuit of the Commission

is yielding better result as more

state governments are inching

towards enacting laws to facilitate

their full adoption of the CPS. To

date, 24 states have enacted Laws

on the CPS which are substantially

in tandem with the provisions

of the PRA 2014 while six

other states - Kwara, Benue, Plateau,

Cross River, Borno and

Akwa-Ibom - have drafted Bills

on the CPS and are currently undergoing

the legislative processes

towards their passage into law.

On the other hand, three states -

Jigawa, Kano and Adamawa -

have embarked on the Contributory

Defined Benefits Scheme

while Bauchi and Katsina states

have also drafted pension reform

bills on the CDBS. Yobe State has,

however, decided to continue with

the Defined Benefits Scheme.

Out of the 24 states with pension

laws on the CPS, five states -

Lagos, Kaduna, Ondo Edo, Ekiti

states, Anambra Local Government

and the Federal Capital Territory,

FCT, are currently remitting

both the employer and employee

pension contributions of

their employees while four

states, namely: Zamfara, Kebbi,

Rivers and Anambra remit only

employee portions of pension

contributions of either the state

or local government employees.

On the determination and funding

of the past service benefits of

the employees (accrued rights) in

states that have adopted the CPS,

seven states and the FCT have

conducted Actuarial Valuation

while Kaduna, Osun, Delta, Lagos

States, Anambra Local Government

and the FCT are funding

their Retirement Benefits

Bond Redemption Fund Accounts

RBBRFA. However, only Delta,

Kaduna, Osun states, Anambra

Local Government and the FCT

have opened RBBRFAs for domiciliation

of their employees’ accrued

rights.On compliance with

the requirement for the procurement

of a Group Life Insurance

Policy for workers under the CPS,

only Kaduna State and the FCT

currently have valid Group Life

Insurance policies for their employees.

Similarly, Lagos, Kaduna,

Delta, Osun states and the

FCT have commenced a hitch-free

and timeous payment of pension

contributions under the CPS.

On the requirement for setting

up a proper administrative structure

to drive implementation of the

CPS in states, in line with their

respective state pension laws,

only 14 states have established

the Pension Board/Bureau/Commission

to implement their pension

reforms. The reluctance to establish

the necessary structures to

drive implementation of the reform

in many states has, however,

contributed to the poor compliance

status among states in

the country.

The implementation of the CPS

has indeed been quite challenging

for the states and local governments,

amidst the tough financial

constraints occasioned by

low internally generated revenues

and dwindling crude oil receipts

into the Federation Account.

Other key challenges militating

against the implementation

of the CPS as observed in

various states have been the lack

of political will on the part of the

state governments and the inordinate

allocation of scarce resources

to less impactful projects.

Many state executives would

rather invest in infrastructure that

could be visible and therefore

serve as a means for gaining

political capital than settle pension

obligations to retirees.

Read full interview online,


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