PENSIONTOP STORY

MDAs flout Certificates of Compliance rules

By ABDUL-KHALIQ OLALEKAN

There are strong indications that the Federal Government’s Ministries, Departments and Agencies (MDAs), are flouting the pension regulation on Certificate of Compliance, by accepting spurious evidence of compliance from contractors, which negates the Pension Reforms Act 2014.

Findings show that MDAs are hesitant in ensuring that companies bidding for works fulfil their obligations relating to pensions as enunciated in the Public Procurement Act 2007.

Reacting on this development, the National Pension Commission (PenCom) said that in 2015, a total of 3,620 employers were issued Compliance Certificates, adding that the low number of requests was due to the reluctance of MDAs to ensure contractors seeking government’s jobs comply with the law as enunciated in the Public Procurement Act 2007.

Since January 2012, it is said that private sector employers who comply with the provisions of the PRA 2014 are issued annual Certificates of Compliance, and 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 showing 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 private sector organisations. 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,” it said.

PenCom posited that methods deployed by MDAs to avoid complying include: the exclusion of the pension requirement in the advertisement for contractors and/or acceptance of spurious evidence of compliance from the contractors.

It said that in a bid to address the lapses, it had agreed with the Bureau of Public Procurement (BPP) that henceforth, only Certificates it issued would be the valid evidence of compliance with the Public Procurement Act 2007.

“The Commission undertakes regular advertisement of the requirements for issuance of the certificate and ensure prompt issuance. In addition, the Commission now hosts the compliance status of companies on its website for easy scrutiny and verifications.

“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,” PenCom said.

 

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