Private Sector Kicks Against Proposed Pension Contribution Increase

The Organised Private Sector of Nigeria has voiced its strong reservations regarding the National Pension Commission's recent proposal to increase mandatory pension contributions. This move, according to the OPSN, is not only premature but also counterproductive, given the current economic climate. The OPSN comprises prominent associations such as the Manufacturers Association of Nigeria, the National Association of Chambers of Commerce, Industry, Mines and Agriculture, and the Nigeria Employers’ Consultative Association, among others. In a joint statement, these associations expressed their concerns, citing the potential negative impact on employment, wage growth, and business sustainability. They argued that the existing minimum pension contribution rate of 18 per cent, as stipulated in the Pension Reform Act 2014, is already comparable to the OECD average and should not be increased without thorough actuarial and economic assessments. The Director-General of NECA, Mr Adewale-Smatt Oyerinde, emphasized the need for careful consideration and social dialogue before implementing any adjustments. He noted that previous adjustments were preceded by extensive stakeholder engagement and that any new proposal must prioritize the survival of businesses and the creation of decent jobs. The OPSN members also highlighted the potential consequences of such an increase, including higher employment costs, reduced recruitment, and increased prices of goods and services. They urged the Federal Government and PenCom to reconsider their approach and focus on promoting macroeconomic stability, enterprise sustainability, and job preservation. The OPSN reiterated its commitment to strengthening Nigeria's pension system but stressed that this must be achieved through constructive dialogue and careful consideration of the broader economic implications. As the Director-General of MAN, Mr Segun Ajayi-Kadir, pointed out, businesses are already grappling with numerous challenges, including high energy costs, elevated interest rates, and regulatory obligations. The proposed increase, he warned, could further exacerbate these pressures and undermine the viability of enterprises. Similarly, the Director-General of NACCIMA, Mr Sola Obadimu, cautioned against imposing additional financial burdens on a struggling business environment, emphasizing the need for coordinated and evaluated policies. The OPSN's stance is clear: while they support efforts to improve retirement outcomes for workers, any proposal must be carefully assessed and supported by credible evidence to ensure it does not jeopardize the very businesses and jobs that underpin the pension system.