On Who determines amount of penalty to be paid by company in default of payment of pension fund as at when due - (Atere v. Steam Broadcasting Communications Limited [2015] 59 N.L.L.R (Part 206) 534 541

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On Who determines amount of penalty to be paid by company in default of payment of pension fund as at when due -

(Atere v. Steam Broadcasting Communications Limited   [2015]  59 N.L.L.R (Part 206)  534    

     Where a company remitting pension contribution of its employee, the amount of penalty to be paid by the defendant shall be  stipulated by the Commission. The said penalty shall not be less than two per cent of the total contribution that remains unpaid for each month or part of each month the default continued.  This is in line with section 11 (7) of the Pension Reform Act, 2004, which is to the effect that the penalty to be stipulated by the commission provided that the penalty shall not be less than 2 per cent. In the instant case, both parties are ad idem that on the 19^th of November, 2010 claimant was paid the sum of N256, 827.50 as shown by Exhibit SAM 4 as her Pension entitlement. However the point of divergence is, the exact amount to be paid as penalty. It is counsel’s submission that the defendant cannot on its own decide to be liable to penalty to the tune of two per cent that it should be stipulated by the commission. The defence having agreed with the submission of the claimant that the defence cannot decide its amount liable urged the court to strike out the claims of the claimant under this heading as same is not ripe for adjudication until the commission has so decided the amount to be stipulated as liability. The court found the argument of the defence counsel cogent going by the provision of Section 11 of the Pension Reforms Act.

      Section 11 (7) of the Pension Reform Act, 2004 provides that;

“Any employer who fails to remit the contributions within the time prescribed in paragraph (b) of subsection (5) of this section shall, in addition to making the remittance already due, be liable to a penalty to be stipulated by the commission provided that the penalty shall not be less than 2 per cent of the total contribution that remains unpaid for each month or part of each month the default continues and the amount of the penalty shall be recoverable as a debt owing to the employees retirement savings account as the case may be.” (Pp. 556-557, Paras. B-C)

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