PenCom warns pension operators against dealing with defaulting employers

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The National Pension Commission (PenCom) has issued a directive warning all Licensed Pension Fund Operators (LPFOs), including Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), against transacting business with service providers who fail to remit pension contributions of their employees. The commission emphasised that engaging with non-compliant companies is unlawful and unethical, contravening the provisions of the Pension Reform Act 2014.

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“The regulator views the continued patronage of defaulting service providers with serious concern. Operators are hereby warned to desist from engaging with any entity that does not fulfil its pension obligations to employees,” the circular read. PenCom stressed that pension operators must perform rigorous due diligence before entering business relationships with vendors, contractors, or partners, ensuring they fully comply with pension remittance requirements.

Industry experts welcomed the move, describing it as timely and necessary. “This is a bold and commendable step by PenCom. By cutting off access to contracts and business opportunities, defaulting employers will now have real incentives to comply with pension law,” said Adegbero Ogunyelu, an expert in the industry. Sunday Aderibole, a pension consultant, also supported the directive, noting that it will strengthen the integrity of the pension system and protect the future of Nigerian workers.

PenCom reiterated its commitment to protecting the interests of Retirement Savings Account (RSA) holders and ensuring full compliance within the industry. The commission warned that any operators violating the directive would face regulatory sanctions, including fines and possible license suspension. PenCom also advised members of the public and employees to report any employer failing to remit pension contributions via its official website or whistleblower channels. “This is a collective responsibility. Employers must comply, operators must uphold the law, and workers must speak out,” PenCom stated

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