OPSN warns FG against pension hikes, calls it ‘Greek Gift’ 

…tells govt to halt  proposal

The Organized Private Sector of Nigeria (OPSN) yesterday warned the Federal Government against the proposed increase in mandatory pension contributions, describing the plan as a “Greek gift” that could ultimately hurt the very workers it is intended to protect by threatening jobs, wage growth and business survival.
In a joint statement issued by the country’s leading private sector organisations, the OPSN expressing its strong opposition to the plan said increasing pension contributions at a time  of mounting economic hardship would impose fresh financial burdens on employers, weaken enterprise sustainability and worsen unemployment.
The umbrella body, comprising the Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Nigeria Employers’ Consultative Association (NECA), the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small Scale Industrialists (NASSI), and 25 other sectoral employer associations, called on the Federal Government and the National Pension Commission (PenCom) to suspend the proposal pending broader consultations and economic impact assessments.
The opposition follows comments by the Director-General of PenCom on plans to raise mandatory pension contributions and introduce an additional annual contribution equivalent to three percent of employers’ total wage bills. While acknowledging the importance of strengthening Nigeria’s pension system, the OPSN argued that reforms must not come at the expense of businesses that provide jobs and fund pension contributions.
Speaking on behalf of the organised private sector, the Director-General of NECA, Mr. Adewale-Smatt Oyerinde, criticised the timing and manner in which the proposal was presented, saying it undermined ongoing stakeholder consultations.
“The OPSN supports efforts aimed at strengthening Nigeria’s pension system and improving retirement outcomes for workers. However, announcing that contribution rates will increase while consultations are still ongoing risks prejudging the outcome of the process and reducing subsequent stakeholder engagements to a mere formality,” Oyerinde said.
He maintained that previous pension reforms were preceded by extensive engagement among government, employers, organised labour and other stakeholders, stressing that any adjustment must be backed by credible actuarial evidence, economic analysis and employment-impact assessments. “Retirement security should not be pursued in a manner that threatens the businesses and jobs upon which the pension system itself depends,” he added.
The OPSN noted that Nigeria’s existing pension contribution rate of 18 percent comprising 10 percent from employers and eight percent from employees under the Pension Reform Act 2014 is already comparable to the average mandatory pension contribution rate of Organisation for Economic Co-operation and Development (OECD) countries. It argued that there is no convincing evidence showing the current rate is inadequate.
Also speaking, Director-General of MAN, Mr. Segun Ajayi-Kadir, warned that businesses are already operating under severe economic pressure and that additional statutory payroll costs could trigger widespread negative consequences across the economy.
“Businesses are already contending with high energy costs, elevated interest rates, exchange-rate volatility, multiple regulatory obligations, weak consumer demand and rising production expenses. Imposing another statutory payroll cost without a comprehensive impact assessment will place further pressure on already struggling enterprises,” Ajayi-Kadir said.
According to him, higher employment costs may force many employers to freeze recruitment, delay salary reviews, reduce staff strength, outsource operations, suspend expansion plans or transfer additional costs to consumers through higher prices. He warned that workers could ultimately bear the burden through slower wage growth, fewer employment opportunities and rising inflation.
On the broader policy implications, Director-General of NACCIMA, Mr. Sola Obadimu, said the proposal contradicted ongoing government efforts to improve the business environment through economic reforms. 
He argued that introducing fresh statutory obligations at a time businesses are struggling to recover could undermine competitiveness and discourage investment. 
“A reform cannot be judged successful merely because it promises improved retirement benefits. Its wider impact on employment, investment, prices, compliance and business survival must also be carefully evaluated,” he stated.
The OPSN also expressed concern about the likely impact on micro, small and medium-sized enterprises (MSMEs). Director-General of NASSI, Engr. Ifeanyi Oputa, warned that smaller businesses, already grappling with rising energy costs, multiple taxes and shrinking consumer demand, could be pushed further into informality if additional mandatory pension obligations are introduced. “A policy intended to strengthen the pension system must not produce the opposite result by shrinking the number of formal employers and contributors,” he cautioned.
To address its concerns, the organised private sector urged the Federal Government to focus first on tackling inflation, improving macroeconomic stability and protecting workers’ purchasing power before considering higher pension deductions. It also called for a comprehensive economic and employment impact assessment and insisted that any future review of pension contributions should emerge only after transparent and inclusive consultations involving employers, organised labour and other stakeholders.
The OPSN concluded that while it remains committed to reforms that improve retirement security for Nigerian workers, sustainable pension reform must strike a balance between future benefits and present economic realities. It warned that weakening businesses through additional employment costs would ultimately erode the very foundation of Nigeria’s contributory pension system.
“A strong pension system requires strong businesses,” the OPSN declared. “Any reform that promises improved retirement outcomes while placing additional pressure on the businesses and jobs that fund those outcomes would ultimately amount to a ‘Greek gift’ to Nigerian workers.”