My Company Has Been Deducting Pension from My Salary for 3 Years but Failed to Remit It to My PFA. What Are My Rights?

Your employer has committed a serious statutory violation, and you have the legal right to compel the company to remit all outstanding pension contributions with a mandatory statutory penalty of not less than 2 percent interest for every month of default. Under the Pension Reform Act (PRA) 2014, the Contributory Pension Scheme is compulsory for all employers of labor who have three or more employees.

Here is what the law mandates regarding pension deductions: 1. Mandatory statutory rates: The minimum rate of contribution is 10% by the employer and 8% by the employee, totaling 18% of your monthly emoluments (basic salary, housing, and transport allowance).

2. Strict 7-day remittance deadline: Section 11(5) of the Pension Reform Act explicitly provides that an employer MUST remit the total contribution directly into the employee’s Retirement Savings Account (RSA) with their chosen Pension Fund Administrator (PFA) not later than 7 working days from the date salaries are paid.

Step-by-Step Procedure to Resolve This Legal Matter:

1. Preserve Contemporaneous Evidence: Collate physical receipts, verified bank timestamps, stamped letters, and electronic communication logs prior to formal intervention.
2. Deliver Statutory Pre-Action Notice: Issue a formal written demand outlining the specific statutory breach and giving the opposing party statutory time to remedy the grievance.
3. Engage Accredited Legal Counsel: Initiate judicial proceedings before the competent court of record or submit an official petition to the relevant regulatory commission.

3. Failure to remit is a punishable offense: Section 11(6) and (7) of the Act stipulates that any employer who fails to remit the deducted funds within 7 days shall, in addition to remitting the principal sum, pay a penalty of not less than 2 percent of the unremitted amount for each month or part of a month that the default continues.

Key Evidential Considerations & Statutory Benchmarks:

• Documented statutory breach and verified timeline of events.
• Jurisdictional competence of the regulatory agency or superior court.
• Contemporaneous written correspondences, notices, and financial records.
• Quantifiable proof of pecuniary loss or civil rights violation.

“The rule of law ensures that statutory rights and duties cannot be compromised by informal arrangements or administrative fiat; every citizen has the constitutional right to due process.”
— Nigerian Legal Precedent & Constitutional Jurisprudence

Deducting pension from your salary slip and pocketing the money without remitting it to your PFA is illegal financial misappropriation. If your employer fails to remit your pension: 1.

Print your PFA statement: Request an official statement of account from your PFA showing the missing monthly remittances.

2. Gather your salary payslips: Collect all your monthly pay slips showing that the company actually deducted the pension from your gross earnings.

3. Report to PenCom: File an official complaint with the National Pension Commission (PenCom).

PenCom employs recovery agents that investigate defaulting companies, compute the mandatory 2% monthly penalties, and freeze corporate accounts to recover workers’ funds.

4. Sue at the National Industrial Court: You can also institute an action at the National Industrial Court to recover all unremitted sums, statutory interest, and substantial damages.

Pension is your future life savings; no company has the right to steal it. In Nigeria, this legal situation is governed by established statutory rules, judicial precedents, and constitutional provisions designed to protect citizens from unfair exploitation and abuse of authority.

The law recognizes that in daily commercial, civil, and domestic interactions, unequal bargaining power often leaves individuals vulnerable to high-handed treatment. Nigerian courts have consistently maintained that contracts, administrative directives, and institutional policies cannot override statutory protections enacted by the National Assembly or the fundamental rights guaranteed under the 1999 Constitution.

A widespread misconception among many Nigerians is that accepting unfair terms, staying silent, or signing boilerplate waiver documents completely surrenders a citizen’s legal rights. This is legally incorrect.

Under established legal doctrines such as unconscionability, public policy, and the rule against illegal self-help, courts will refuse to enforce transactions or conduct that violate statutory standards.

Whether dealing with law enforcement officers, landlords, commercial employers, financial institutions, or corporate merchants, the legal obligation to act in good faith and adhere strictly to due process remains mandatory and non-negotiable. If you find yourself facing this exact legal dilemma, taking prompt, structured action is critical to protecting your interests.

First, document every single interaction immediately: preserve all receipts, bank payment alerts, text messages, audio recordings, and timestamped photographs that support your claim. Second, avoid engaging in violent confrontation, physical altercations, or illegal self-help, as taking the law into your own hands can jeopardize your legal standing.

Third, issue a formal written letter of demand or protest setting out the facts clearly and citing the relevant statutory requirements, giving the opposing party a reasonable timeframe to resolve the issue. Where administrative avenues and formal notices fail to produce a just outcome, you should promptly instruct a qualified legal practitioner to initiate civil proceedings or lodge formal petitions with regulatory agencies such as the Federal Competition and Consumer Protection Commission (FCCPC), the National Human Rights Commission (NHRC), or specialized tribunals like the Small Claims Court.

For direct regulatory verification, official complaints, or accessing statutory registers without third-party fees, members of the public can consult the official portal of the Central Bank of Nigeria (CBN) Consumer Protection Portal.

Taking lawful legal action not only restores your hard-earned rights and recovers damages, but it also helps strengthen institutional accountability and the rule of law across the Nigerian society.

Ignorance of the law is no excuse.