The National Pension Commission has begun clampdown on employers who deducted monthly pensions from employees’ salaries but failed to remit them to their Pension Funds Administrators.
As such, the pension industry regulator has appointed recovery agents to go after the defaulting employers to recover outstanding liabilities.
PenCom made this known in its second quarter report for 2021.
The report revealed that workers who attained the age of 50 and retired under the Contributory Pension Scheme but were not entitled to monthly pensions rose to 123,758 as of the end of June 2021.
The affected public and private sector workers got a total refund of N31.46bn from their PFAs which constituted the total balance in their RSAs.
PenCom noted that most of the affected retirees had less than N550,000 balance in their Retirement Savings Accounts with the respective PFAs.
It noted that a few of them included nationals of other countries who were relocating back to their countries.
The report read in part, “During the quarter under review, the commission approved en-bloc payment of retirement benefits to 2,024 retirees whose RSA balances were N550,000 or below and considered insufficient to procure programmed withdrawal or retiree life annuity of a reasonable amount for an expected life span.
“In this regard, a total sum of N527.23m was paid to the 2,024 retirees from both the public and private sectors.”
PenCom noted that the ridiculously low contributions recorded during their working years made it impossible for them to be placed on the payroll of either their PFAs or insurance companies.
In line with the regulation of the CPS, retirees with less that N550,000 are meant to be given all the monies they contributed as such were deemed to be too small to be managed by the PFAs or life insurers, either as programmed withdrawal or as life annuity.
PenCom said it appointed recovery agents as part of efforts to clamp down on activities of employers who deducted the monthly emolument of their workers but did not remit to the respective PFAs.
The RAs were mandated to recover the outstanding liabilities with penalties from defaulting employers.
This was to further reduce a situation where workers retire and meet very low amounts in their RSAs, rendering them un-pensionable.
