The National Pension Commission has confirmed that parent companies, subsidiaries, and institutional shareholders of licensed pension fund operators are required to have a valid Pension Clearance Certificate (PCC).
The commission stated in a new circular on Friday that PFO investors are not exempt from the earlier rule preventing PFOs from partnering with vendors lacking valid PCCs.
As of May 15, PenCom had granted PCCs to 21,978 employers from different sectors in Nigeria. The PCC confirms that an organization is compliant with its pension obligations to employees and qualifies it to apply for government contracts.
In the circular signed by A.M. Saleem, Head of PenCom’s Surveillance Department, it was emphasized that parent companies, subsidiaries, holding companies, and institutional shareholders of licensed pension fund operators must possess valid pension clearance certificates. Additionally, they must ensure that all vendors and service providers they contract with meet the PCC requirement before finalizing any service level or technical agreements.
Licensed pension fund operators have been given six months by the commission to enforce compliance with the Pension Reform Act 2014 throughout their vendors, parent companies, subsidiaries, and institutional shareholders.
PenCom said the directive was prompted by the persistent failure of many employers to comply with Section 2 of the PRA 2014, which requires all employers in the public and private sectors, including federal, state, and local governments, to participate in the Contributory Pension Scheme and remit pension contributions within seven working days following salary payments.
Besides increasing awareness campaigns and appointing Recovery Agents to audit defaulters, recover unpaid contributions, and impose sanctions, the regulator has prohibited Licensed Pension Fund Operators, both Pension Fund Administrators and Pension Fund Custodians, from engaging with service providers and vendors who do not submit pension contributions for their employees, as verified by a Pension Clearance Certificate from PenCom.
