The Organised Private Sector of Nigeria, OPSN, has opposed the proposed increase in mandatory pension contributions being considered by the National Pension Commission, PenCom, warning that the move could negatively impact businesses, jobs and workers’ earnings.
OPSN, which comprises major business groups, including the Manufacturers Association of Nigeria, MAN, the Nigeria Employers’ Consultative Association, NECA, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, the Nigerian Association of Small and Medium Enterprises, NASME, and the Nigerian Association of Small Scale Industrialists, NASSI, described the proposal as a “Greek gift” to Nigerian workers.
In a joint statement issued on Thursday, the employers’ groups argued that although the proposal is being presented as a means of improving retirement benefits, it could ultimately hurt workers by weakening businesses and reducing employment opportunities.
The group said any reform aimed at improving retirement outcomes must take into account the sustainability of businesses that fund the pension system.
According to OPSN, Nigeria already operates a mandatory pension contribution rate of 18 per cent under the Pension Reform Act 2014, with employers contributing 10 per cent and employees contributing 8 per cent.
The group noted that the current rate is comparable to the average mandatory pension contribution level in member countries of the Organisation for Economic Cooperation and Development, OECD.
“Any proposal for an increase must be supported by Nigeria specific actuarial evidence demonstrating that the current rate is insufficient and that a higher rate would not undermine employment, wages, compliance and enterprise sustainability,” the
