Tuesday 27 December 2016

Workers’ future in jeopardy over unremitted pension deductions

Mr. Johnson Obinna worked for an aviation company in Lagos for five years until he got another job with a marketing firm in 2013.He had opened a Retirement Savings Account with a Pension Fund Administrator and expected his employer to be remitting his monthly pension contributions to the account each time his salary was paid.

According to the Pension Reform Act, 2004, his employer has the responsibility of deducting 7.5 per cent of his total monthly emolument and augment it with same amount to make a total of 15 per cent, which should be transferred into his RSA with the PFA of his choice.

Obinna used to notice the deduction of 7.5 per cent of his monthly income from his payslips when he was with the former employer, but was not comfortable with the arrangement because the amount being so deducted was not reflecting on the monthly SMS alert he was getting from his PFA.

He and his other colleagues with similar experiences were, however, too scared to raise any issue, because they never wanted to have any issue with their employer as long as their salaries were being paid.

When he got a new job and went to his PFA to verify the actual balance in his RSA, he was disappointed that his former employer had been defrauding him of his pension benefits.

“My PFA told me that just a paltry N50,000 was remitted into my RSA for five years, which is not right. From my calculations, I should have nothing less than N1.55m in the retirement savings account if my former employer had been remitting the pension deductions from my salary,” he said regretfully.

Obinna is not alone in the quagmire because many workers under the Contributory Pension Scheme are finding zero balance or ridiculously low amounts in their RSAs upon retirement, a situation that makes them not to be entitled to drawing pensions when they are out of service.

Mr. TayoAdeleke, who is currently working with an IT firm, said he discovered that the balance in his RSA was lower than what it should be.

“My company has not remitted my pensions for 11 months, which shows a shortfall of N440,000. I have gone to my PFA to lodge a complaint that my payslips show that my pensions are being deducted but the RSA alert is not reflecting that they were being remitted,” he lamented.

Adeleke said that his PFA said it would officially write his employer to remit the pension contributions of all the employees, but nothing had changed.

Most workers in this condition are afraid to confront their employers to ask them to remit their pension contributions to their RSAs because they do not want to be sacked. Yet, the more they keep quiet, the more the employers will divert what is meant to be their pension savings and put the workers’ financial future in jeopardy.

Mr. Kelvin Davis,who retired from the federal civil service in October 2015, stated that his PFA had not commenced the payment of his pensions.

“They are saying they cannot commence the payment of my pensions because the Federal Government had not paid my accrued rights and they need such to augment my contributions under the CPS. It has not been easy surviving without any monthly income for more than a year,” he said.

Mr. Tajudeen Lawal, who retired as a teacher 16 months ago,similarly complained that his PFA had not commenced the payment of his pensions, because the government had yet to pay his accrued rights.

“The last time I went to my PFA, I was shouting that I would die in their office if they would not pay me, but after begging me, some of the directors contributed N20,000 for me to manage for the meantime,” he said.

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