PenCom threatens employers: no compliance certificates, no business transaction

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The National Pension Commission (PenCom) and the Bureau of Public Procurement (BPP) have agreed that henceforth, only compliance certificates issued by the commission would be the valid evidence of compliance with the Public Procurement Act 2007, PenCom Director-General, Mrs Chinelo Anohu-Amazu has said.

The PenCom boss who made this known in a report on level of compliance with the Pension Reform Act (PRA) 2014 said the Commission has been working with the Financial Reporting Council (formerly Nigeria Accounting Standard Board), through a Joint Committee, to include report on compliance with the provisions of the PRA 2014 as part of the disclosure requirements in audited financial statement of all organisations that employ a minimum of three staff.

She said going forward the Federal Government will not transact any business with private sector organisations that do not have compliance certificates issued by PenCom.

According to her, the decision was reached as a result of MDAs’ reluctance to ensure that companies bidding for works have fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007.

She explained that for a private organisation to be issued a compliance certificate by PenCom, the organisation must have complied with the provisions of the Pension Reform Act (PRA) 2014.

She further said the provision requires that to be issued with the certificate, employers must submit evidence of remitting contributions to the Retirement Savings Accounts (RSA) of their employees as well as show evidence of valid group life insurance policy.

She noted that all  Ministries, Departments and Agencies (MDAs) of the Federal Government are required to demand for the compliance certificate as a requirement for transacting any business with a private sector organisation.

She said: “With effect from January 2012, private sector employers that comply with the provisions of the PRA 2014 are issued annual certificates of compliance. To be issued with the certificate, employers are required to submit evidence of remitting contributions to the Retirement Savings Accounts (RSA) of their employees as well as show evidence of valid group life insurance policy.

“All MDAs are required to demand for the compliance certificate as a requirement for transacting any business with a private sector organisation. Appropriate circulars have been issued to all MDAs in that regard. Also, the Commission monitors advertisements for contract by MDA to ensure that the pre-qualification criteria included evidence of compliance with the PRA 2014.

“In 2015, 3,620 employers were issued compliance certificates. The main reason for the low number of requests being the reluctance of MDAs to ensure that companies bidding for works have fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007.

“Methods deployed by MDAs to avoid complying included the exclusion of the pension requirement in the advertisement for contractors and/or acceptance of spurious evidence of compliance from the contractors. To address the lapses, the Commission and the BPP have agreed that henceforth only Certificates issued by the Commission would be the valid evidence of compliance with the Public Procurement Act 2007.

“The Commission has been working with the Financial Reporting Council (formerly Nigeria Accounting Standard Board), through a Joint Committee, to include report on compliance with the provisions of the PRA 2014 as part of the disclosure requirements in Audited Financial Statement of all organizations that employ a minimum of three staff.”

She noted that while the Committee is yet to conclude its work, it is expected that the new International Financial Reporting Standards (IFRS) would include this requirement.