Employers and CPS
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The Pension Reform Act (PRA) 2014 mandates an employer to remit the monthly pension contributions not later than 7 working days after the payment of the employee’s salary. This is specifically stated in Section 11(3) of the PRA 2014.

Complete and timely remittances of pension contributions not only show that such employer is responsible but it also ensures that the employees enjoy the benefits accruing to such timely remittances through the enjoyment of return on their contributions. It also prevents delay in accessing retirement benefits in the future by such employees as will be seen later in the course of this article.

In a recently released regulation titled “Revised Regulation on the Administration of Retirement and Terminal Benefits” by the National Pension Commission (PenCom), one of the grounds for accessing the Retirement Savings Account (RSA) as stated in Section 2.3 is complete remittances of all pension contributions.

Specifically, Section 2.3.6 of the Guideline states, inter-alia, that “where there are outstanding contributions…., the PFA shall request the employer to pay same to the RSA of the employee, not later than seven (7) calendar days in case of loss of job/resignation, or two (2) months to the expected date of retirement, in case of mandatory or compulsory retirement as well as retirement on medical ground”.

Furthermore, Section 2.3.7 now states the penalty for non-compliance by the employer. It reads “where the employer fails to remit the outstanding pension contributions….. of a private sector retiree as at the date of retirement, the employer is said to be in default”. Therefore, such an employer will be sanctioned according to the applicable sanction regime of the Commission.


The attendant effect of non-remittance greatly affects both employer and employee in the long run.

While for the employer, it could lead to sanctions and cashflow problems in the future especially where a huge amount is involved, for the employees, it deprives such remittances of the opportunity to enjoy adequate returns and also could lead to a delay in retirement benefits up to at least 6 months.

In conclusion, it is imperative for the employee to always monitor their RSA monthly contributions and ensure that they are being remitted as deducted by the employer. We have discussed extensively on how to do that in this article here.

It is also important for the employer to regularly remit their pension obligations to the appropriate quarters because this has a long-lasting positive effect on the business now and in the future.

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