Nigerian Private Sector Rejects Proposed Pension Contribution Increase

The Organised Private Sector of Nigeria (OPSN) has expressed strong opposition to a proposal by the National Pension Commission (PenCom) to increase mandatory pension contribution rates beyond the current 18 percent.

In a joint statement issued by key business associations including the Manufacturers Association of Nigeria (MAN), the Nigeria Employers’ Consultative Association (NECA), and the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) the group described the proposed hike as premature and counterproductive.

Under the Pension Reform Act of 2014, the current minimum contribution stands at 18 percent of an employee’s monthly emoluments, split between a 10 percent employer contribution and an 8 percent employee contribution. Business leaders contend that this rate is already comparable to international standards and should not be raised without empirical actuarial evidence showing a clear necessity.

Representatives from the business sector warned that imposing an additional financial burden on employers during a period of challenging economic conditions marked by high energy costs, exchange rate volatility, and elevated operating expenses could backfire. They cautioned that the move could lead to job cuts, reduced hiring, slower wage growth, and increased consumer prices, while potentially driving more businesses into the informal economy.

The private sector umbrella group has urged PenCom and the Federal Government to halt further steps toward the policy until comprehensive economic impact assessments are completed and broader macroeconomic stability is achieved.