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More petitions to PENCOM over non-remittance of pension deductions
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The success of the new Contributory Pension Scheme has been hinged on the ability of the workers and the public to furnish the market regulator, the National Pension Commission (PENCOM) with information concerning compliance with the provisions of Pension Reform Act 2004 and any observed violation of the law.
While it has been alleged that many organisations have form the habit of deducting pensions from workers salaries without remitting to the licensed Pension Fund Administrators (PFAs), it is believed that not much could be done by the market watch dog unless it is reported to it.
BusinessDay reported last week that many private sector workers risk old age because some employers of labour are making deductions from salaries without actually remitting them to the PFAs.
Section 11 (5) of the Pension Act provides that the employer is empowered to deduct at source the monthly contribution of the employee in his employment and not later than seven working days from the day the employee is paid his salary.
One of the cases at hand to which PENCOM has given May 8 as deadline for the organisation to comply or face prosecution is Yabatech management with its staff.
An anonymous petition was sent to PENCOM in August 2007, alleging that the management of Yaba College of Technology, Lagos (Yabatech) has been deducting their salary for pension purposes but that the money were never remitted.
Another anonymous petition on October 8, 2007 was received by PENCOM alleging that while the salary of Yabatech staff was being deducted at source since they are federal civil servants, the management of the college was also deducting part of the workers salary without remitting the money to licensed (PFAs.). Alleging that the amount being deducted at source is higher than the rate applied in the school and enjoining the commission to check up the deduction rate for the two schools, Yabatech Primary and Secondary Schools at the Federal Ministry of Education.
PENCOM on august 24, 2007, wrote to the management of Yabatech Primary and Secondary Schools that it has been brought to the attention of the commission that the school has been contravening the provisions of the Pension Act and for demanded response on the allegation.
While there was no response from the school after a period of more than two months, PENCOM it was gathered sent a reminder. And six month after, sent another dated April 17, 2008, expressing concern over the failure to respond to the allegation and the persistent violation of the Pension Act and further threatened to take legal actions against the school and its management in accordance with the provisions of the Pension Act. The commission also issued an ultimatum of three weeks to the school management to respond to its letter to avoid being prosecuted. The ultimatum expires on May 8.
Meanwhile, after having made spirited efforts to get the Rector refund all the money alleged to have been illegally withdrawn from their salaries, counsel to the aggrieved staff, Festus Keyamo Chambers, have petitioned the Minister of Education.
In the letter dated April 3, 2003, the counsel to the staff said "Despite the above measures to get the matter sorted out peacefully without exposing his dirty and stinking linen in the public, it is clear to us that the Rector will not bulge unless summoned by the Hon. Minister of Education to explain."
The counsel to the staff prayed the Minister to summon the Rector to explain the continuous deduction of the pension contributions from Yabatech Secondary and Staff Schools despite being warned to stop it as it amounts to double deductions on the workers salaries.
He was also to be made "to explain why the Federal Government had credited the Yabatech account of all the staff as staff of Yabatech, yet he pays them as employees of Yabatech and converts the difference every month."
The solicitors further urged the Minister to make the Rector account for all the double deductions made from the workers salaries from 2002 till date that were not paid into their Retirement Savings Account.
Besides that the House of Representatives Committee on Education have been petitioned by Counsel to the staff urging them to step in. In addition to the similar prayers made to the Minister of Education, the legislators were requested to also audit the account of Yabatech Secondary and Staff schools.
While it has been alleged that many organisations have form the habit of deducting pensions from workers salaries without remitting to the licensed Pension Fund Administrators (PFAs), it is believed that not much could be done by the market watch dog unless it is reported to it.
BusinessDay reported last week that many private sector workers risk old age because some employers of labour are making deductions from salaries without actually remitting them to the PFAs.
Section 11 (5) of the Pension Act provides that the employer is empowered to deduct at source the monthly contribution of the employee in his employment and not later than seven working days from the day the employee is paid his salary.
One of the cases at hand to which PENCOM has given May 8 as deadline for the organisation to comply or face prosecution is Yabatech management with its staff.
An anonymous petition was sent to PENCOM in August 2007, alleging that the management of Yaba College of Technology, Lagos (Yabatech) has been deducting their salary for pension purposes but that the money were never remitted.
Another anonymous petition on October 8, 2007 was received by PENCOM alleging that while the salary of Yabatech staff was being deducted at source since they are federal civil servants, the management of the college was also deducting part of the workers salary without remitting the money to licensed (PFAs.). Alleging that the amount being deducted at source is higher than the rate applied in the school and enjoining the commission to check up the deduction rate for the two schools, Yabatech Primary and Secondary Schools at the Federal Ministry of Education.
PENCOM on august 24, 2007, wrote to the management of Yabatech Primary and Secondary Schools that it has been brought to the attention of the commission that the school has been contravening the provisions of the Pension Act and for demanded response on the allegation.
While there was no response from the school after a period of more than two months, PENCOM it was gathered sent a reminder. And six month after, sent another dated April 17, 2008, expressing concern over the failure to respond to the allegation and the persistent violation of the Pension Act and further threatened to take legal actions against the school and its management in accordance with the provisions of the Pension Act. The commission also issued an ultimatum of three weeks to the school management to respond to its letter to avoid being prosecuted. The ultimatum expires on May 8.
Meanwhile, after having made spirited efforts to get the Rector refund all the money alleged to have been illegally withdrawn from their salaries, counsel to the aggrieved staff, Festus Keyamo Chambers, have petitioned the Minister of Education.
In the letter dated April 3, 2003, the counsel to the staff said "Despite the above measures to get the matter sorted out peacefully without exposing his dirty and stinking linen in the public, it is clear to us that the Rector will not bulge unless summoned by the Hon. Minister of Education to explain."
The counsel to the staff prayed the Minister to summon the Rector to explain the continuous deduction of the pension contributions from Yabatech Secondary and Staff Schools despite being warned to stop it as it amounts to double deductions on the workers salaries.
He was also to be made "to explain why the Federal Government had credited the Yabatech account of all the staff as staff of Yabatech, yet he pays them as employees of Yabatech and converts the difference every month."
The solicitors further urged the Minister to make the Rector account for all the double deductions made from the workers salaries from 2002 till date that were not paid into their Retirement Savings Account.
Besides that the House of Representatives Committee on Education have been petitioned by Counsel to the staff urging them to step in. In addition to the similar prayers made to the Minister of Education, the legislators were requested to also audit the account of Yabatech Secondary and Staff schools.
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