REGIME OF SANCTIONS AND PENALTIES FOR NON-COMPLIANCE WITH PENSION REFORM ACT 2004
Act · Finance
Policy date: 2004-01-01
An Act establishes sanctions and penalties for failing to comply with the Pension Reform Act 2004. It targets employers, pension operators, and individuals to enforce pension obligations. This deters non-compliance and protects contributors in Nigeria's pension system.
REGIME OF SANCTIONS AND PENALTIES FOR NON-COMPLIANCE WITH PENSION REFORM ACT 2004
What Is This Policy?
A comprehensive schedule of administrative and criminal penalties applicable to employers, pension operators, and individuals who fail to comply with their obligations under the Pension Reform Act.
Who Does It Target?
Employers failing to deduct, remit, or register employees under the CPS Licensed PFAs and PFCs violating their licence conditions Directors of defaulting companies PenCom enforcement and compliance department
What Does It Aim to Achieve?
Deter non-compliance through a proportionate, predictable, and consistently applied sanctions regime that protects contributors and ensures the integrity of Nigeria's pension system.
Key Features
Tiered Penalties: Classifies violations by severity with corresponding penalty tiers from administrative warnings to criminal prosecution. Employer Defaults: Employers who fail to deduct or remit contributions face fines and potential director imprisonment. Operator Violations: PFAs and PFCs face asset-based fines for licence condition breaches. Cumulative Penalties: Each day of continuing default accrues additional daily penalties.
Current Status
Rollout Stage: Active Coverage: All employers and licensed operators nationwide Beneficiaries: Pension contributors; pension system integrity Funding: Fines collected go to PenCom enforcement fund
How to Access
Employers must self-assess and regularise defaults before PenCom initiates proceedings Operators may make representations before final determination Appeals of PenCom sanctions go to the Federal High Court Application method: PenCom initiates enforcement proceedings; no public application required.
Important Terms
Daily default penalties accrue from the date of violation, not from the date of discovery Paying fines does not discharge the obligation to also remit outstanding contributions Criminal prosecution may run concurrently with administrative sanctions
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom)
Legal Framework
Issued under the regulatory powers of the National Pension Commission (PenCom) pursuant to the Pension Reform Act 2014. The PenCom Act and the Pension Reform Act 2014 are the principal statutes. Administrative penalties are enforced under the Criminal Code Act provisions applicable to financial misconduct, while criminal sanctions align with the Companies and Allied Matters Act 2020. Employers' obligations derive from the Labour Act and relevant tax legislation.