According to data from the National Pension Commission(PenCom), companies paid out a total of N93.49 billion in pensions in 2021 but did not credit those benefits to their employees’ Retirement Savings Accounts.
This consisted of N73.97 billion in contributions that companies had sent to the PFCs, or Pension Fund Custodians, but had not yet been credited to the employees’ Retirement Savings Accounts.
Also included were N19.52 billion in uncredited Transition Contributors Fund, TCF, contributions.
In her presentation on the industry’s 2021 report, PenCom Director-General Aisha Dahir-Umar announced that PenCom has instructed the Pension Fund Administrators, PFAs, and the PFCs to address any outstanding payments.
She stated, that, “A notable outcome of the 2021 review of Licenced Pension Fund Operators records was the un-credited pension contributions domiciled in the Contribution Reconciliation Accounts of PFAs totalling N73.97bn.
“This amount represented contributions remitted by employers to the Pension Fund Custodians, but yet to be credited into the employees’ Retirement Savings Accounts due to the submission of incomplete or inaccurate schedules by employers.
“The commission has given a six-month timeline to the PFAs and PFC to follow up with the respective employers and ensure that the funds are appropriately transferred to the employees’ RSAs.
“The TCF account was created to keep pension funds of employees that failed to open RSAs in line with Section 4.1.1 of the guidelines for Transitional Contributions Fund.
“This requires a PFA chosen by employers whose employees have received a salary for a minimum of six months but failed to open a Retirement Savings Account, to create and maintain a TCF to manage the accumulated pension contributions pending when the employees opened Retirement Savings Accounts.
“The commission had equally mandated the PFAs to ensure resolution of all outstanding contributions in the TCF and forward monthly status reports.”
According to Dahir-Umar, the industry is still focused on finding solutions to the problems associated with the Federal Government’s outstanding pension liabilities under the CPS, expanding the CPS’s coverage to include the sub-national governments and the informal sector, and diversifying pension fund investments.
She added that other priority areas included the push to raise the standard of customer service delivery, improvement of the workforce’s operational capability of the regulator and operators, and revitalization of the commission’s public awareness and education programmes.
“The commission continued to regulate and supervise the Nigerian pension industry in a transparent and consultative manner through the instrumentality of on-site/special examinations, as well as off-site surveillance and analysis of all Pension Fund Operators,” she said.
“Specifically, the commission monitored the activities of the Pension Fund Operators and conducted routine inspection of States’ Pension Bureaux to ascertain the level of implementation of the CPS, as well as the administration of the Defined Benefits Schemes in the states and the FCT.”
