Employers threaten contribution halt over governance vacuum at NSITF, PenCom

The Nigeria Employers’ Consultative Association (NECA) has issued a strong call to the Federal Government, demanding the immediate constitution of the Boards of the Nigeria Social Insurance Trust Fund (NSITF) and the National Pension Commission (PenCom).

The organization warns that prolonged delays in these appointments are creating significant governance concerns, potentially leading to a halt in employer contributions.

Speaking in Lagos on Sunday, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, expressed deep concern over the lack of proper governance structures, citing issues of transparency and accountability in the management of employer contributions and workers’ pension funds.

“Without these Boards, there is a glaring governance gap that weakens regulatory oversight and exposes NSITF and pension funds to risks,” Oyerinde stated, highlighting the necessity of these bodies as mandated by the NSITF Act of 1993 and the Pension Reform Act (PRA) 2014.

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He emphasized the nature of these funds, clarifying, “Contributions to NSITF and PenCom are not government revenue but employer funds meant for specific purposes.” The prolonged absence of governance, he warned, could lead to mismanagement and a loss of public trust.

Oyerinde also pointed out that the government’s inaction contradicts international best practices, particularly those upheld by the International Labour Organization (ILO), which emphasizes effective governance in social security and pension management.

He issued a stark warning: “The business community remains committed to fulfilling its statutory obligations but expects the government to uphold principles of good governance and global best practices. Failure to do so could erode confidence in these institutions, ultimately impacting the financial security of Nigerian workers and retirees.”

Oyerinde cautioned that if the Federal Government fails to act promptly, employers might be compelled to suspend their contributions due to concerns over transparency and potential fund mismanagement.

NECA urged the Federal Government to urgently constitute the Boards in line with legal requirements to restore trust and ensure the efficient management of employer and worker contributions.

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