NATIONAL PENSION COMMISSION FRAMEWORK FOR RECOVERY OF OUTSTANDING PENSION CONTRIBUTIONS AND INTEREST PENALTY FROM DEFAULTING EMPLOYERS
Framework · Finance
A Framework identifies and recovers outstanding pension contributions from defaulting employers, including interest penalties. It targets defaulting employers, affected employees, and enforcement officers. This ensures employees' retirement savings are protected.
NATIONAL PENSION COMMISSION FRAMEWORK FOR RECOVERY OF OUTSTANDING PENSION CONTRIBUTIONS AND INTEREST PENALTY FROM DEFAULTING EMPLOYERS
What Is This Policy?
PenCom's framework for identifying employers who have failed to remit employee pension contributions and for recovering outstanding contributions plus penalty interest on behalf of affected employees.
Who Does It Target?
Employers who have defaulted on pension remittances Employees whose employers have failed to remit pension contributions PFAs tracking unremitted contributions PenCom compliance and enforcement officers
What Does It Aim to Achieve?
Recover pension contributions withheld by defaulting employers, penalise non-compliance to deter future defaults, and ensure employees' retirement savings are not prejudiced by employer negligence.
Key Features
Default Identification: PFAs report employers who fail to remit contributions to PenCom; employees may also report non-remittance. Demand Notice: PenCom issues a demand notice to the defaulting employer requiring immediate remittance of outstanding contributions plus interest penalty. Interest Penalty: Outstanding contributions attract a mandatory interest penalty of 2% per month from the date of default. Prosecution: Persistent defaulters may be prosecuted, and directors may be held personally liable under the Pension Reform Act.
Current Status
Rollout Stage: Active Coverage: All employers under the Contributory Pension Scheme Beneficiaries: Employees whose contributions have been withheld Funding: Recovered through employer enforcement; PenCom budget
How to Access
Employees may report non-remittance directly to PenCom Check RSA statement regularly to verify employer contributions are being received Provide employment and payroll evidence when filing a non-remittance complaint Application method: File non-remittance complaints at PenCom or through your PFA.
Important Terms
Directors of companies that willfully default on pension remittances face personal criminal liability Interest penalty of 2% per month is non-negotiable and not waivable Employees are not affected by employer default as contributions can be recovered
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom)
Legal Framework
Issued under the Pension Reform Act 2014, which established the National Pension Commission (PenCom) and the Contributory Pension Scheme. Derives authority from PenCom's regulatory mandate under the Pension Reform Act and operates alongside the Investment Regulations for Pension Fund Administrators and the Guidelines for Pension Fund Operators.