Contributory Pension: Trustfund Moves to Tackle Uncredited Contributions

Ndubuisi Francis in Abuja

A leading pension fund administrator (PFA), Trustfund Pension Limited, has urged organisations in the public and private sectors to help check the rising cases of uncredited contributions under the Contributory Pension Scheme (CPS), due largely to wrongly-filled remittance schedules on the part of employers.

To stem the tide, Trustfund Pension at the weekend held a forum/interactive session in Abuja with employers of labour who were largely represented by pension desk officers.

Speaking at the forum, the Head, Compliance, Trustfund Pensions Limited, Christopher Fakanlu itemised some of the recent challenges leading to rising cases of uncredited employees’ contributions to include duplicate personal identification numbers (PINs), PINS not in Trustfund’s database/other PFAs PINS, remittance schedules without PINS, over/under remittance, refunds and invalid/incorrect PINS.

Others are mismatched PINS, duplicate period, payment without schedule and remittances of retirees with regained employment.

According to him, the forum was put together to actually sensitise employers on recent developments in the industry, adding that it was also an avenue to sensitise them on their responsibilities under the Contributory Pension Scheme and rise in the level of uncredited contributions we have.

He said: “We have seen that most of the issues reside with the employers. So, we also put them together to sensitise them on the growth and also how to start reducing the level of growth we have in the uncredited contributions.

“The growth in uncredited contributions has been an issue in the industry. However, what we have done as a pension fund administrator is to look at it as an issue and confront it, and then in confronting it, we know employers have a role to play. How we can achieve this is by having a discussion with them.”

He called on employers who subscribe to the Contributory Pension Scheme to support efforts by Trustfund to minimise the growth of uncredited and unreconciled contributions.

The Natonal Pension Commission (PenCom) had in June 2019 revealed that based on PFAs’ returns, over N3.4 billion pension contributions were uncredited into state employees’ Retirement Savings Accounts (RSAs) as of May 31, 2019, adding that the age analysis showed that over 38 per cent of the amount had been outstanding for over one year.

Fakanlu, who stated that the forum is an annual event by Trustfund to interface with employers of labour on trending issues affecting the CPS, added that the 2021 session was designed to address the rising cases of uncredited contributions.

In an interview with THISDAY on the sidelines of the forum, Fakanlu said: “We are witnessing a surge in un-credited and un-reconciled contributions because employers make bulk payment without accompanying schedules.

“In other instances, we are seeing a schedule for say N1 million and the actual remittance of just N500,000 and that immediately constitutes a problem.”

The session, he stated, was aimed at enhancing the compliance of the employers with the CPS and regulations and guidelines issued by PenCom.

Fakanlu said failure to reconcile payments that accrue to contributors denies them of the interest that would have accrued if their contributions had been invested much earlier.