PFAs to face sanction for conniving with PHCN workers -By Sola Alabadan

The National Pension Commission (PenCom) says some reabsorbed employees of the defunct Power Holding Company of Nigeria (PHCN) connived with some Pension Fund Administrators (PFAs) to withdraw 25 per cent of their pension contributions, in spite of the fact that their Retirement Savings Accounts (RSAs) were still active.

Misbahu Yola, MD, Legacy Pension

PenCom has been investigating the case, and has assured that any PFA found gulty to have willfully violated the provisions of the Pension Reform Act 2014 (PRA) would be sanctioned accordingly.
This was disclosed in the latest quarterly report issued by PenCom under the leadership of its Director General, Mrs. Chinelo Anohu-Amazu.
Specifically, PenCom stated that “It was brought to the attention of the Commission that some reabsorbed employees of the defunct PHCN connived with some PFAs to access 25 per cent of their RSA balances using their disengagement letters to obtain the Commission’s approval, in spite of the fact that their RSAs were still active.
“The Commission was still investigating the case with a view to take appropriate actions against those PFAs found to have willfully violated the provisions of the PRA.”
Although, the Pension Act stipulates that an employee shall not be entitled to make any withdrawal from his retirement savings account before attaining the age of 50 years, an employee who is disengagaged is allowed to withdraw 25 per cent of his RSA balances provided such an employee does not secure another employment.
Due to the fact that the affected former employees have been reabsorbed by PHCN, they no longer qualify to withdraw 25 per cent of his RSA balances.
In specific terms, Section 7(2) of the Pension Act states that “Where an employee voluntarily retires, disengages or is disengaged from employment as provided for under subsections (2) and (5) of section 16 of this Act, the employee may with the approval of the Commission, withdraw an amount of money not exceeding 25 per cent of the total amount credited to his retirement savings account, provided that such withdrawals shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.”
It was added in subsection (3) of the same section that “Where an employee has accessed the amount standing in his retirement savings account pursuant to subsection (2) this section, such employee shall subsequently access the balance in the retirerement savings account in accordance with subsection (l) of this section.”

Culled from Daily Independent