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Small-scale employers shiver over PenCom guideline

By ANDREW OJIEZEL

ALTHOUGH the grace period given to all employers of labour by National Pension Commission (PenCom) to fulfill life insurance guideline for employees might have passed, yet the dust it raised is yet to settle down as most private employers are finding it difficult to comply with that law.

National Daily investigations showed that (small scale/one man business) employers of labour have continued to view the guideline as unobtainable and untenable in Nigeria context for now, saying “how can 'one-man' business with five employees be made to embark on insurance for employees, though we are not against the move but we wonder how it can be done in Nigeria.”

For example, Mr. Abiodun Oduntan, a tailor based in Magboro Town noted that the five employees with him are boys on apprenticeship; “how and where do I get money to insure them? They will have their freedom.”
Similarly, a manager of shopping hall along Nnamdi Azikiwe Street, Idumota who refused to put down his name in print, explained that the boys and girls with him are mere service boys and girls that would be settled whenever their period of apprenticeship were over. He stressed “how can I give them insurance policy when in real term they would be settled off whenever their agreed period of apprenticeship expires?”

It would be recalled that the National Pension Commission (PenCom) sometime ago came out with a guideline that tend to make it compulsory for all employers of labour with a least five or more workers to maintain life insurance policy for them.

According to Section 9 (3) of the Pension Reform Act (PRA) 2004 and Section 5.5 of the guidelines for life insurance policy for employees, jointly issued by the National Insurance Commission (NIC) and the PenCom required every employer, to which the Act applies, to maintain life insurance policy in favour of all their employees for a minimum of three times the annual total emolument.

In accordance with Section 5.5 of the Guidelines for Life Insurance Policy for Employees, employers of labour are required to submit copies of the Insurance Certificates with the schedule of benefits, to the National Pension Commission (PenCom) and the Pension Fund Administrators (PFAs) where the employees maintain their Retirement Savings Accounts (RSAs), not later than March 31 of every year.

The commission had in that release disclosed that employers that have not submitted copies of insurance certificates after the March 31of every year would be considered as defaulting of Section 9(3) of the Pension Reform Act (PRA) 2004.