Reported by Ariajegbe Sylvia Esezobor
The National Pension Commission has introduced an automated system for calculating penalties against employers who delay remitting workers’ pension contributions, in a move designed to strengthen compliance with the Pension Reform Act and close a gap that has left millions of workers exposed to lost retirement savings. The Director-General of PenCom, Omolola Oloworaran, disclosed the new system on Tuesday, October 12, 2026, during the 2026 Annual PenCom Media Conference in Abuja.
“I would also note that the new system we just implemented for PCC auto-calculates penalties. So, if you are requesting a pension plan certificate, and there are any delays in you remitting your pension until you pay your penalties, you will not be able to get your pension plan certificate,” Oloworaran said . The initiative links the calculation and settlement of outstanding penalties directly to the issuance of the Pension Clearance Certificate, a document required for government contracts and other business transactions. Employers with unpaid penalties will be unable to obtain the certificate until they settle their liabilities, a measure that effectively bars them from public procurement and other regulated commercial activities .
The new system builds on the existing penalty regime under Section 11(6) of the Pension Reform Act 2014, which provides that an employer who fails to remit pension contributions within the stipulated period is liable to a penalty of not less than two per cent of the unpaid contribution for every month, or part thereof, that the default persists . The law requires employers to deduct eight per cent of an employee’s monthly emoluments and add ten per cent from the employer’s own funds, remitting the total eighteen per cent to the employee’s Retirement Savings Account within seven working days after salary payment . The penalty is recoverable as a debt owed directly to the employee’s RSA, ensuring that workers are compensated for delays .
PenCom has extended the compliance framework beyond the certificate requirement. Oloworaran disclosed that pension fund operators are now prohibited from investing in companies that fail to remit pension contributions for their employees, covering investment placements and other financial transactions involving non-compliant organisations . She cited First Bank, United Bank for Africa, Guaranty Trust Bank, Access Bank and Zenith Bank as examples of major financial institutions with pension industry affiliations that could support enforcement . The commission has also engaged recovery agents to examine employers’ records, determine outstanding liabilities and facilitate recoveries. Cumulative recoveries from defaulting employers had reached N36.6 billion as of July 2026, with recoveries recorded during the year already surpassing the previous annual record .
Oloworaran was unequivocal about the moral dimension of the problem. “A deduction on a payslip that does not reach a Retirement Savings Account is a breach of trust and a breach of the law,” she said . “We will find what is owed, we will recover it, and we will hold those responsible to account” . She acknowledged that some employers continued to withhold contributions or delay payments despite regulatory interventions, but said the commission was monitoring and pursuing those who failed to contribute or contributed late .
The enforcement push comes against a backdrop of persistent non-remittance that has undermined confidence in the Contributory Pension Scheme. Penalties paid by defaulting employers since the scheme’s inception reached N16.63 billion by the fourth quarter of 2025, with total recoveries of N32.75 billion comprising N16.12 billion in outstanding contributions and the balance in penalties . In the first quarter of 2026 alone, PenCom recovered N1.18 billion from 15 companies, made up of N450 million in contributions and N729 million in penalties, with six recalcitrant employers interrogated following the commission’s engagement with the Independent Corrupt Practices and Other Related Offences Commission . The partnership with the ICPC, formalised through a Memorandum of Understanding in October 2025, has also yielded more than N3 billion from defaulting firms in the electricity sector .
The human cost of non-remittance is borne by workers who discover years later that deductions from their salaries never reached their retirement accounts. The problem cuts across both public and private sector organisations . The Nigeria Labour Congress had threatened a nationwide crackdown on defaulting employers from June 1, 2026, warning that violators would face prosecution and public exposure . The commission’s automated penalty system represents a regulatory response that operates independently of industrial action.
Oloworaran also disclosed progress on other fronts. Two additional states commenced pension contributions in 2026, although they had yet to meet all requirements for full implementation . The commission introduced quarterly engagements with the Integrated Personnel and Payroll Information System to resolve cases of pension deductions not remitted to workers’ accounts . She said delays in processing retirement benefits had been substantially addressed, with Pension Fund Administrators now required to approve benefit requests within 48 hours, compared with delays of up to 21 months previously . The commission expects complaints to receive responses within 24 hours, or 48 hours where additional time is required .
The automated penalty system is the latest in a series of digital compliance measures introduced by the commission, including the electronic Pension Clearance Certificate platform, which has generated N184.28 billion in cumulative pension remittances . The commission views the decline in enforcement activity in some quarters not as a weakening of compliance but as evidence that intensified enforcement had resolved several major outstanding cases . For employers, the message is clear: delayed remittances now carry immediate and automated consequences. For workers, the automated system offers a measure of assurance that the contributions deducted from their salaries will be pursued with the same rigour as any other debt. As Oloworaran put it, the commission will find what is owed, recover it, and hold those responsible to account.
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