The National Pension Commission (PenCom) has revealed that the continuous delay in the implementation of the 2016 Budget has served as the major constraint to initiated the moves to develop a database of eligible employers in the country to check level of compliance to Pension Reform Act (PRA) 2014.
The Daily Times recently gathered that the National Bureau for Statistics (NBS) and PenCom constituted a technical committee for developing a data base of eligible employers which would assist the Commission in its compliance efforts.
It was gathered that the NBS is to assist the Commission to enumerate all private sector employers in the country with a view to identifying all organisations that must comply with the PRA 2014.
A source in PenCom told our reporter that the exercise has not commenced due to budgetary constraint.
The commission also said there are ongoing efforts to collaborate with the Federal Inland Revenue Service (FIRS) and the Internal Revenue Service Departments at the state level to access their database on employers, adding that these agencies have reliable data on employers that would help in expanding its coverage.
According to PenCom, about 7million employees working with public/private sector employers have registered with PFAs for the management of their pension contributions. It noted that the number of companies whose employees have so far registered is 73,403, adding that of this number, 43,918 employers with more than three employees have largely complied with the provisions of the PRA.
PenCom said the remaining 29,485 with less than three employees are mostly the non-compliant organizations, stressing that this category of employers are usually more of portfolio companies and in some cases are companies that had either been liquidated or ceased to exist.
In the same vein, the pension regulatory body accused Government’s Ministries, Departments and Agencies (MDAs) of acceptance spurious evidence of compliance from contractors and being reluctant in ensuring that companies bidding for works fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007.
The National Pension Commission at the National Assembly mentioned that in 2015, 3,620 employers were issued Compliance Certificates and that the low number of requests was due to the reluctance of MDAs to ensure contractors seeking government’s jobs complied with the law as enunciated in the Public Procurement Act 2007.
The commission noted that with effect from January 2012, private sector employers that comply with the provisions of the PRA 2014 are issued annual Certificates of Compliance, and that to be issued with the certificate, employers are required to submit evidence of remitting contributions to the Retirement Savings Accounts (RSA) of their employees as well as show evidence of valid group life insurance policy.
“All MDAs are required to demand for the Compliance Certificate as a requirement for transacting any business with a private sector organisations. Appropriate circulars have been issued to all MDAs in that regard.
“Also, the Commission monitors advertisements for contract by MDA to ensure that the pre-qualification criteria included evidence of compliance with the PRA 2014. In 2015, 3,620 employers were issued Compliance Certificates.
“The main reason for the low number of requests being the reluctance of MDAs to ensure that companies bidding for works have fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007,” it said.
PenCom posited that methods deployed by MDAs to avoid complying include: the exclusion of the pension requirement in the advertisement for contractors and/or acceptance of spurious evidence of compliance from the contractors.
It said that in a bid to address the lapses, it had agreed with the Bureau of Public Procurement (BPP) that henceforth, only Certificates it issued would be the valid evidence of compliance with the Public Procurement Act 2007.
“The Commission undertakes regular advertisement of the requirements for issuance of the certificate and ensure prompt issuance. In addition, the Commission now hosts the compliance status of companies on its website for easy scrutiny and verifications.
“The Commission has been working with the Financial Reporting Council (formerly Nigeria Accounting Standard Board), through a Joint Committee, to include report on compliance with the provisions of the PRA 2014 as part of the disclosure requirements in Audited Financial Statement of all organizations that employ a minimum of three staff,” PenCom said.
It maintained that whilst the Committee is yet to conclude its work, it is expected that the new International Financial Reporting Standards (IFRS) would recognise compliance with the provisions of the PRA 2014 as part of the disclosure requirements in Audited Financial Statement of all organisations that employ a minimum of three staff.
Published in The Daily Times Newspaper on Monday, June 20, 2016
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