ORGANISED PRIVATE SECTOR: Defaulters Should Be Prosecuted
In separate chats with The Guardian, the Manufacturers Association of Nigeria, (MAN) and Lagos Chamber of Commerce and Industry (LCCI), they condemned employers over alleged refusal to remit deductions to Pension Fund Administrators (PFAs).
President of Manufacturers Association of Nigeria, Franks Jacobs, described as ‘criminal’ the refusal by some employers to remit whatever they collected from workers to the fund managers.
“There should be appropriate sanction on all defaulters. If they collect money from workers and failed to remit to the relevant fund manager, they should be prosecuted, so as not to jeopardise the scheme,” he said.
Although, he described the 2004 pension scheme as one of the best dividends of democracy under former President Olusegun Obasanjo, he alleged that the scheme managers are also defaulting, as some have failed in their obligation to retirees.
“I know that many of my members are complying. It is the best thing that the government has done for the workers, especially, now that there is no more gratuity for them. But the problem with the new pension scheme is that workers are not getting their entitlement as at when due. I know of an employee, who resigned and for a very long time, he was unable to access his entitlement, he was not paid.”
The MAN president also advocated equal percentage of contribution to the scheme by employers and employees.
“I don’t want to subscribe to the new contribution formula, which made it mandatory for employers to contribute 10 per cent and eight per cent by employees.
Before, it used to be equal contribution of seven and half per cent each by employers and employees. But the government in its wisdom has a reason for doing that. They should revert to the old contribution arrangement, because manufacturers were not carried along before arriving at the new contribution formula. It was arbitrarily done.”
On the state governments that have hitherto failed to key into the new pension scheme, Jacobs said the situation required urgent intervention from the Federal Government.
“I don’t know why these states have not keyed into the pension scheme. They need to comply to make workers happy and to contribute meaningfully to the economy.”
The Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, like Jacobs, urged the government to enforce compliance with the provision of the 2004 Pension Act.
“It is not good to deduct from workers income and refused to remit to the PFAs. This is not good for workers welfare because their future is being compromised for the present.
Compliance is an evidence of good corporate governance standard. The law is clear about this behaviour. The pension Act specifies sanctions for defaulters,” he said, adding that the new pension scheme is preferable to the old, which was fraught with irregularities.
Yusuf said there is need to educate members of the public about the new scheme for better understanding of its workability.
“The pension fund administrators that I know are professionals and people are getting their entitlement. The problem is that pensioners don’t understand the rules and procedures of the new pension arrangement, which makes it difficult for them to stick to their rights, especially, when violated.”
On state’s refusal to key into the new pension arrangement, as stipulated in the 2004 Act, Yusuf said their compliance is of best interest of the workers.
“ The states should key into the pension scheme. That is the way to preserve worker’s welfare. It is in the interest of the affected states to migrate to the new pension regime and get a pension administrator for their workers, in line with the pension laws.”
He also described the new pension regime as one of the best gifts for the workers, saying the old scheme had issues ranging from bad administration, improper documentation and lack of adequate knowledge by workers, “and so many of them were not paid.”