In an effort to defuse tensions with the Nigeria Labour Congress (NLC) after the union threatened to go on strike nationwide, the Federal Government has promised to reverse deductions from the Employees’ Compensation Scheme, which is run by the Nigeria Social Insurance Trust Fund.
The Federal Government was accused by the NLC last week of transferring 40% of NSITF donations to the government’s treasury. The NLC called for an immediate return and the complete reconstruction of the National Pension Commission board, claiming that the action compromised workers’ social protection. It issued a warning that failure to comply could lead to widespread strikes.
Employees who sustain diseases, injuries, disabilities, or pass away at work might receive financial assistance under the Employees’ Compensation Scheme, a social insurance scheme. Employer contributions, usually around 1% of monthly payroll, provide complete funding for the program; employee contributions are not needed.
NSITF Managing Director Oluwaseun Faleye acknowledged that withdrawals from workers’ compensation contributions had taken place in a letter to the NLC dated August 16, 2025, but he clarified that they were not a diversion of funds. The Director-General of the Budget Office, the Ministers of Finance and Labor, and the Accountant-General of the Federation also received the letter.
According to Faleye, the deductions were made in accordance with a federal law that was implemented in December 2023 and mandated that all government-owned businesses send half of their domestically generated revenue to the Treasury. President Bola Tinubu’s fiscal strategy was reflected in the policy, which was released by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy. Its goal was to increase government revenue and reduce a growing fiscal deficit.
“Remember that on December 28, 2023, the Federal Ministry of Finance issued a circular (Ref: FMFCME/OTHERS/IGR/CFR/21/2021) establishing a requirement that 50% of the internally generated revenue of all Federal Government-owned businesses be automatically deducted.” Faleye described in the correspondence.
The agency stated that in accordance with a March 2024 decision from the Accountant-General of the Federation, employers’ contributions—which are statutory duties rather than government revenue—will no longer be withheld, and that part of the money that had previously been withheld has already been returned.
According to him, NSITF is actively working with authorities to find a solution, and deductions on investment income derived from these donations are still being made. No more debits will be made, according to officials from the Ministry of Finance and the Budget Office.
“We have received assurances that this issue will be resolved. The NSITF promised that no more deductions will be taken from contributions or investment proceeds at meetings with the Minister of Finance and the Director-General of the Budget Office in August 2025.
After Ben Akabueze’s term ended in June 2024, Tinubu chose Tanimu Yakubu as Director-General of the Budget Office. In March 2025, he appointed Shamsedeen Ogunjimi as Accountant-General of the Federation to replace the retired Oluwatoyin Madehin.
Assistant General Secretary Christopher Onyeka stated that while the labor union acknowledged receiving the letter from NSITF, its executive council will consider it before making a decision regarding the proposed strike.
Onyeka maintained that NSITF should not be viewed as a revenue-generating organization and defined it as a tripartite organization that is jointly owned by the government, employers, and employees.
“The purpose of the NSITF contributions is to reimburse employees in the event of an injury. “They should not be used for fiscal purposes because they are not government revenue,” he stated.
“The agency’s capacity to assist employees when needed would be jeopardized if these monies were depleted. The Ministry of Finance’s classification of NSITF as a revenue-generating organization is unusual.
The union stated that letters were addressed to the Ministry of Finance and NSITF more than a month ago, and that the deductions started under the present administration. On Saturday, the union got an answer. “It is our duty to protect these funds,” Onyeka continued.
Faleye responded to claims that NSITF was trying to change the Employees’ Compensation Act in a way that would jeopardize workers’ rights by stating that the agency’s plans were meant to strengthen enforcement rather than erode safeguards.
Through our yearly retreats, which are attended by other tripartite stakeholders, we have interacted with the National Assembly as an organization looking to improve its operational efficiency. We provided the National Assembly with proposals and ideas during those retreats, which we think would improve adherence to the Employees’ Compensation Scheme even more,” the agency said.
Among other things, one of those suggestions is that NSITF be given further authority to enforce ECA compliance on employers who are in default. Instead than undermining workers’ rights, this suggestion will strengthen and defend them.
The National Assembly has the authority to take any additional legislative action, the executive added. “As an organization, we have no authority to enact laws or halt the National Assembly’s efforts to change any existing legislation. Only the legislature has such authority. In order to have an inclusive law when it is finished, Faleye stated, “We have decided to engage the process at the right time during stakeholders’ engagement exercises for such amendments, and we will advise all stakeholders to engage appropriately as well.”
Concerns regarding the PenCom’s non-constitution were also voiced by the NLC, which described the circumstance as a grave legal violation that would jeopardize the supervision of employees’ retirement funds.
The NLC claimed in a statement released last week by its Central Working Committee that the PenCom Act and other pertinent laws are violated when a board is not properly constituted. The union cautioned that the existing void weakens statutory tripartite monitoring and raises the possibility of political meddling and poor management by enabling the federal government to exert unilateral authority over pension funds paid by businesses and employees.
“The NLC expresses serious concern about the Governing Board of PenCom’s non-constitution, which violates the PenCom Act and other laws. By eliminating the statutory tripartite monitoring and allowing the government to solely oversee the pension funds paid by businesses and employees, this illegal void has raised the possibility of political meddling and poor administration, the statement stated.
The labor union urged for quick action to restore good governance and emphasized that pension funds are deferred salaries for employees rather than government revenue. The NLC further stated, “We demand the immediate constitution of the PenCom Board in full compliance with the law.”
A 16-member PenCom Governing Board is established under Section 19 of the Pension Reform Act of 2014. Subject to Senate confirmation, the President names the Director General, Chairman, and four full-time Commissioners. The Nigeria Employers’ Consultative Association, the Nigeria Union of Pensioners, the Trade Union Congress, and the NLC are among the important stakeholders whose representatives will occupy the remaining ten seats.
On June 16, 2023, President Bola Tinubu ordered the dissolution of the previous board and other federal parastatal boards. PenCom’s board is still unfinished, even though a number of boards have subsequently been reorganized.
The Senate confirmed the appointment of Director-General Omolola Oloworaran on November 21, 2024, but the Chairman and four full-time Commissioners have not yet been selected. Institutions such as the Federal Ministry of Finance, Securities and Exchange Commission, and Central Bank will designate their representatives after they are appointed.
Ivor Takor, the director of the Centre for Pension Rights Advocacy, stated that there is reason to be concerned about the delay in reassembling the board. The executive said that the NLC’s demand for the board’s immediate reconstitution was in line with the Pension Reform Act of 2014.
Takor clarified the two categories of funds in response to the NLC’s request for pension fund accounts: administrative funds run by PenCom and pension assets owned by Pension Fund Administrators.
“The Governing Board receives reports on PenCom administrative funds, and it is the duty of board representatives to communicate this information to the NLC,” he stated. “This process is delayed when the board is not fully seated.”
PFAs invest and report pension assets to PenCom, which compiles and disseminates monthly, quarterly, and yearly reports. PenCom must publish its annual report, including audited statements, in at least three national newspapers within six months after the conclusion of the fiscal year, according to Section 36(3) of the Act. The public, including the NLC, has access to these reports.
Takor stated that while the NLC’s worries regarding the board’s delay are legitimate, the law does not support its demand for direct access to pension fund information.
Moses Igbrude, a consumer rights campaigner, advocated for talks instead of strikes. “Dispute resolution, not strikes, is the main focus. Before escalation, the two sides should get together, discuss the situation, and decide on a reasonable stance, he stated.
The NLC has become more outspoken on a variety of topics, including minimum wage talks, energy rate increases, and the elimination of fuel subsidies. An already strained relationship may become much more strained if pension protection is added to the list of disagreements.
