Workers whose employers remit their pension contributions late stand the risk of losing their investment, the Regional Manager, Trustfund Pensions, Obafemi Arobadi, has said.
Arobadi, who spoke at the firm’s yearly employers/interactive session on regulatory compliance, said due to the late payment of their contributions to the Pension Fund Administrators (PFAs), most contributors might lose gains accruing to them.
He said employers were expected to remit the monthly contributions within seven days of paying their workers’salary.
“When you don’t pay as at when due, your employee loses investment income. Seven days, that’s what the law says. We are organising this yearly event to update the employers as well as employees on the recent issues in the industry,” he said.
About 50 per cent of the employers, he said, could be considered as complying with the seven days’ grace, pointing out that the most challenging in pension administration has been the non-remittance of workers’ contributors by the employers.
He said most times, PFAs are reluctant to enforce the law because they do not want to endanger the workers’ interest, as such a measure could result in default companies being sealed up.
He said: “Before exploring the law, we normally try to know the reason for non remittance. In the past, we’ve seen some, who were not complying and after our investigation, they paid all the outstanding. Should the premises be sealed, it will affect the workers.
“Corporate governance issue has been our major challenge. For some employers, it’s non-challance, why some employers see it as a burden, hence they fail to comply.”
Arobadi said the non-payment of salaries in major states had made remittance in those states difficult, adding that the states normally remit when the backlog of salary areas were eventually paid. He said employers should ensure that the employees’pins were quoted correctly on the remittance schedule, as it would help in prompt update of members accounts.
The Interactive session, which had Trustfund Pension Plc as the Pension Fund Administrator (PFA) and Zenith Pension Custodian as the Pension Fund Custodian (PFC), also highlighted some problems hindering access to the funds by the contributors after retirement.
Speaking on behalf of the Custodian, Daniel Onatoye said the new scheme, backed by the Pension Reform Act, 2014, had been a success story. According to him, it is unlike the old scheme, which had no fund set aside to pay workers after retirement.
He, however, cautioned against companies outside the scheme, lodging their workers’contribution in the bank, as most of them would not be able to give appropriate information, should there be any error at the time of payment.