PenCom Remittance Deadlines: How to Generate Schedules and Avoid the 2% Monthly Penalty
If you run payroll in Nigeria, pension remittance is one of those tasks that sits quietly at the end of the month and then suddenly becomes urgent. Salaries go out, everyone is relieved, and then somebody in finance remembers that the contributions still have to reach the Pension Fund Administrators.
Missing that window is expensive. The penalty for late pension remittance is charged at not less than 2% of the unpaid contribution for every month or part of a month the money stays with the employer. The employer pays it out of pocket, and the employee gets the benefit. Nobody enjoys explaining that line to a managing director.
This article walks through the actual deadline, what a proper remittance schedule looks like, how to generate one without errors, and a simple monthly routine that keeps you compliant without drama.
The Deadline in Plain Terms
Under the Pension Reform Act 2014, an employer is required to remit both the employee contribution and the employer contribution to each employee's Retirement Savings Account within 7 working days from the date salaries are paid.
Read that again slowly, because the wording matters. The clock starts from the day salaries are paid, not from the end of the month, and not from the day your payroll officer finishes the payroll file. Weekends and public holidays are excluded, which is the only piece of good news here.
So if you pay salaries on the 28th and the 28th falls on a Friday, your seven working days begin that Friday. By the time the following week closes, the money should already be sitting in the PFAs' accounts with matching schedules submitted.
Worth noting: some employers assume the deadline is tied to the statutory end of the month. It is not. It is tied to your own pay date, which means companies that pay early also remit early.
What the 2% Penalty Really Means
The Act sets a penalty of not less than 2% of the total contribution that remains unpaid, applied for each month or part of a month the default continues. Two details do most of the damage.
First, the penalty is calculated on the unpaid contribution amount, not on your entire payroll. That is a small mercy.
Second, and this is the painful part, part of a month counts as a full month. Being three days late can cost exactly the same as being thirty days late.
Here is a simple example. Suppose your total monthly pension contribution across all staff is ₦5,000,000. If that money sits unremitted for three months, the penalty works out to roughly 2% x 3 x ₦5,000,000, which is ₦300,000. That amount is paid on top of the contributions themselves, and it goes into the employees' RSAs. You gain nothing from the delay except a bigger bill.
The penalty is not a fine you can negotiate away at year end. It accrues quietly, and it is usually discovered during a PenCom examination or when you apply for a compliance certificate.
What Goes Into a Remittance Schedule
A remittance schedule is the document that tells the PFA whose money this is. Without it, the PFA cannot credit individual RSAs, and your payment is treated as incomplete. The money may leave your account, but it will not land where it should.
A standard schedule should carry the following for every employee:
- Full name exactly as it appears on the RSA record
- RSA PIN issued by the PFA
- PFA name, especially important when staff have moved between administrators
- Month of contribution and the employer's PenCom registration number
- Employee contribution, employer contribution and the total per person
- Totals: number of employees, total employee contribution, total employer contribution
One thing that causes endless arguments is the contribution base. Contributions are computed on monthly emolument, which the Act defines as basic salary, housing allowance and transport allowance. Not the full gross, and definitely not net pay. If your payroll structure lumps everything into one line, you may need to split it out before you can calculate correctly.
How to Generate the Schedule Without Errors
Most PFAs provide a template or an employer portal, and many payroll software packages can export the schedule directly. Whichever route you take, the process looks roughly the same.
1. Pull the payroll data for the month
Work from the final approved payroll, not a draft. If a salary adjustment happens after you generate the schedule, you will need to regenerate it and adjust the payment accordingly.
2. Confirm RSA PINs for every employee
New hires are the usual source of trouble. An employee cannot be added to a schedule without an RSA PIN, and opening an RSA takes time. Start the process on the first day a new person resumes, not at month end.
3. Calculate contributions on the correct base
Employee contribution is 8% of monthly emolument and employer contribution is 10%. Voluntary contributions, if any, should be shown separately so the PFA can credit them properly.
4. Use the PFA template and keep the format intact
Column headers, date formats and PIN fields all matter. Renaming a column or trimming a leading zero on a PIN can cause the entire upload to fail, and you may not find out until days later.
5. Reconcile the totals before you submit
Compare the schedule total against the payroll pension deduction total. If the two do not match to the naira, find out why before the payment leaves your account. Fixing a mismatch after remittance involves formal adjustment requests and a lot of email.
6. Submit the schedule and the payment together
The schedule should reference the same month and the same amount as the payment. Where possible, send both to the PFA on the same day and keep the acknowledgement. That acknowledgement is your evidence if a dispute arises later.
Mistakes That Cause Late Remittance
Most late remittances are not deliberate. They happen because of small process gaps that repeat every month.
- Waiting for the PFA to send a schedule. The employer's obligation is to remit, not to wait. You can use the PFA's template and send it yourself.
- Splitting the payment from the schedule. Money without a schedule sits in suspense. A schedule without money is just a document.
- Treating "7 days" as calendar days. Working days exclude weekends and public holidays, but they also pass faster than people expect.
- Using gross salary as the base. This inflates contributions, creates reconciliation headaches, and can lead to refund requests that take months.
- No monthly reconciliation. If nobody checks that the PFA actually credited every employee, errors stay hidden until an employee complains.
For a broader look at how contribution rates and salary structures interact, it helps to review how monthly emolument is defined for pension purposes before you lock down your payroll template.
A Monthly Routine That Actually Works
The simplest way to avoid the penalty is to stop treating remittance as a month end task. Break it into steps that happen across the month.
- First week: confirm new hires have RSA PINs and collect missing details
- Payroll approval day: lock the contribution base and calculate totals
- Same day or next day: generate the schedule from the approved payroll
- Within two working days of salary payment: initiate the remittance
- Within seven working days: confirm PFAs have received and acknowledged both
- End of month: file the schedule, payment evidence and acknowledgement together
Practical tip: set your internal deadline at five working days instead of seven. That buffer absorbs bank delays, portal downtime and the inevitable Friday afternoon query from the finance controller.
If You Have Already Missed a Deadline
It happens. The important thing is what you do next, because the penalty grows with every passing month.
Remit the outstanding contributions immediately, even if the schedule is not perfect. A remittance that is 95% correct is far better than money sitting in your account while you chase one missing PIN. Then submit a corrected schedule for the remainder and keep a written record of the sequence.
It also helps to review your remittance history before applying for a PenCom compliance certificate, since these certificates are typically required for certain government and corporate contracts. Gaps in your remittance record tend to surface at the worst possible moment. If you are unsure about your standing, ask your PFA for a reconciliation statement and confirm the current position with PenCom directly, since guidance and enforcement practices are updated from time to time.
The Bottom Line
The 2% monthly penalty is one of the most avoidable costs in Nigerian payroll administration. It does not require complicated software or a large compliance team. It requires a schedule that is accurate, a payment that matches it, and a habit of finishing both within seven working days of payday.
Get the routine right once, document it, and pension remittance stops being a monthly emergency. Your finance team will thank you, and your employees' retirement accounts will be better for it.
Next step: check your last three remittance dates against your salary payment dates. If any gap is longer than seven working days, that is where to focus first. You may also find it useful to read our guide on preparing for a PenCom compliance certificate.