BOOST Growth in number of account holders has been attributed to a number of factors including increase in the level of compliance by the private sector
Following their failure to meet stipulated requirements for clearance certificates to enable them bid for Federal Government contracts, the National Pension Commission (PenCom) rejected applications from 691 organisations. According to a report on its 2019 transactions, the commission received 19,298 applications for Pension Clearance Certificates (PCCs) out of which, 18,607 certificates were issued while 691 applications were rejected due to failure to meet the stipulated requirements. The report also confirmed that the sum of ₦93.79 billion was remitted into the Retirement Savings Accounts (RSAs) of 341,786 employees by the 18,579 applicants that were issued the PCCs. In compliance with Section 2 of the Pension Reform Act 2014, the commission processes and issues Pension Compliance Certificates to private sector organisations that meet the requirements. The certificate is mandatory for companies bidding for Federal Government contracts as provided in the Public Procurement Act of 2007 and being enforced by the Bureau of Public Procurement (BPP) in furtherance of its collaboration with the commission. Also within the period, the total membership of the pension schemes increased by 5.67 per cent from 8.46 million as at December 31, 2018 to 8.94 million as at December 31, 2019. According to the record, membership of the RSA scheme dominated the total pension scheme at 8.89 million, representing 99.35 per cent, while the AES and the CPFAs accounted for the balance of 0.65 per cent (40,951 and 17,349 respectively). The growth was attributed to a number of factors including increase in the level of compliance by the private sector as a result of the various steps taken by the commission to improve compliance and coverage (such as engagement of recovery agents), as well as marketing strategies of the PFAs. In addition, the enforcement of the requirements of the Public Procurement Act 2007 for bidders for Federal Government contracts to provide evidence of compliance with the PRA 2014 also had positive impacts on the increase in membership. The report said: “Following the launch of the Micro Pension Plan (MPP) in March 2019, the registration for the MPP commenced with the RSA Registration count for participants standing at 39,686 as at December 31, 2019. It is expected that the RSA registration will continue to grow to improve Scheme membership with the sustained implementation of the Micro Pension Plan in 2020. “The memberships of the CPFAs and AES were 17,349 and 40,951 as at 31 December 31, 2019. While the membership of the AES schemes remained the same at 40,951 between 2018 and 2019, that of the CPFAs marginally declined by 4.27 per cent from 18,122 in 2018 to 17,349 in 2019. The stagnation and marginal decline in membership were partly attributable to the closure of the schemes to new members as stipulated by Sections 50(1)(h) and 51 of the PRA 2014. Besides the non-clearance of some employers, the commission also recovered about N16.85 billion from those who failed to remit deductions from their employees to Pension Fund Administrators (PFAs).
through the instrumentality of Recovery Agents set up for that purpose.
According to the report, the RAs are required to review the pension records of the employers and recover outstanding pension contributions with penalties. For the year under review, the sum of N1.84 billion was recovered by the RAs.
“This brought the total recoveries made by the RAs, from inception of the exercise in 2012 to December 31, 2019, to N16.85 billion. “This figure represents principal contributions of N8.557 billion and penalties of N8.29 billion.
The amounts recovered had since been credited to the respective RSAs of the employees,” the report said. On retirement annuity, the report indicated that 13,153 contributors retired under life annuity.
The 13,153 retirees received a total sum of N24.92 billion as lump sum, paid premium of N78.44 billion to insurance companies in exchange for monthly annuity payments of N817.62 million.
The total number of retirees on annuity increased from 61,652 in December, 2018 to 74,805 as at December 31, 2019, representing a growth of 21.33 per cent.
A breakdown of the total number of retirees shows that the FGN retirees accounted for 45,695 or 61.09 per cent, state retirees accounted for 9,078 or12.14 per cent while the private sector retirees accounted for 20,032 or 26.78 per cent.