PenCom, NLC Lagos Unite Against Pension Non-Remittance by Employers

The National Pension Commission (PenCom) and the Nigeria Labour Congress (NLC) in Lagos have taken a significant step against employers who fail to remit pension contributions, as they've agreed to constitute a compliance task force that'll ensure employers comply with pension regulations. This task force is significant because it'll help protect workers' pension benefits. During an interactive session on the Contributory Pension Scheme (CPS) in Ikeja, Lagos, both parties agreed on the need for this task force.

The Contributory Pension Scheme, which began in June 2004 under the Pension Reform Act, is designed to provide a structured retirement plan. It's a plan where both employers and employees contribute to an individual Retirement Savings Account (RSA), managed by a Pension Fund Administrator (PFA). The total minimum contribution is 18% of the employee's monthly emolument. The worker won't receive their retirement benefits until after they retire.

According to Ahmed Lawan, the Head of Compliance and Enforcement Department at PenCom, the CPS has transformed pension administration from a mere promise into a funded and enforceable obligation. Before the pension reforms, pension payments in the public sector were largely based on promises by the government without corresponding savings or funding arrangements. Lawan explained that the Pension Reform Act changed this narrative by making it mandatory for employers to remit pension contributions into individual RSAs, thereby protecting workers even if employers cease operations. He didn't say this would be easy, but it's a step in the right direction.

Lawan also disclosed that while the previous government had delayed remittances of accrued pension rights, the situation has improved significantly under the current administration. The current president has remitted all outstanding accrued rights, ensuring that any worker in the public sector who is about to retire will have their accrued pension already in their account. This is a big deal, as it means workers won't have to wait for their benefits.

However, Lawan raised concerns over the widespread non-remittance among private sector employers. He stated that PenCom is adopting a stricter compliance strategy to address the problem. For compliance, PenCom won't use a weak strategy; instead, they'll enforce compliance at the standard level. Lawan emphasized that the money contributed by Nigerian workers has grown to almost N30 trillion, and nobody should participate in the ecosystem without contributing. It's only fair that everyone contributes to the system.

PenCom has introduced measures to prevent non-compliant organisations from benefiting from government business or pension-related investments. Employers can't do business with the Federal Government unless they show evidence of fulfilling their pension contribution obligations for their employees. Similarly, banks, companies, or investors can't take pension investments unless they've made contributions for all their employees. This is a way to ensure that everyone plays by the rules.

Lawan reiterated that PenCom is deepening collaboration with labour unions and industry associations to expose and sanction defaulting employers. The essence of the interactive session is to educate, enlighten, and build partnerships to ensure that everybody understands that they can't hide or run if they fail to make pension contributions. It's a collaborative effort to protect workers' rights.

The non-remittance of pension contributions constitutes a gross violation of labour laws, an abuse of workers' rights, and an act of economic injustice against employees who've faithfully rendered services to their employers. This isn't something that should be taken lightly, as it affects workers' livelihoods.

Speaking at the interactive session, the Chairperson of NLC, Lagos State chapter, Funmilayo Sessi, announced plans to commence enforcement actions against employers who fail to remit workers' pension deductions. Sessi expressed concern over the growing trend of non-remittance of pension contributions by both government agencies and private employers. She described the non-remittance of pension deductions as a violation of labour laws and workers' rights, insisting that pension benefits shouldn't be treated as privileges. They're a right that workers have earned.

The NLC Lagos State Council will immediately begin monitoring and enforcement activities across the state, following increasing complaints from affected workers in both public and private establishments. Sessi announced plans to inaugurate task force commanders drawn from labour unions to strengthen pension compliance enforcement across the state. Volunteer members of the Lagos NLC constituted the task force to ensure remittances of pension funds to retirees in Lagos, starting operations from 1 June. They're taking a proactive approach to address the issue.

The labour leader further warned that defaulting employers would be publicly exposed and prosecuted where necessary. Sessi called on all employers to act responsibly and comply fully with pension remittance obligations in the interest of industrial harmony, social justice, and national development. It's in everyone's best interest to comply with the regulations.