NSITF Moves to Prevent Strike as FG Promises Refunds; NLC Leaders to Review Development
The Federal Government has committed to reversing deductions from the Employees’ Compensation Scheme managed by the Nigeria Social Insurance Trust Fund (NSITF), in an effort to de-escalate tensions with the Nigeria Labour Congress (NLC). The union had threatened a nationwide strike over the issue.
Last week, the NLC accused the government of diverting 40% of NSITF contributions into the federal treasury, arguing that this undermines workers’ social protections. The union demanded an immediate refund of the diverted funds and the full reconstitution of the National Pension Commission (PenCom) board, warning that failure to comply could lead to industrial action nationwide.
The Employees’ Compensation Scheme is a social insurance program that provides financial support to workers injured or affected by work-related illnesses, disabilities, or death. It is funded solely by employer contributions, usually about 1% of monthly payroll, with no contributions from employees.
In a letter dated August 16, 2025, NSITF Managing Director Oluwaseun Faleye acknowledged that deductions had occurred but insisted they were not a diversion of funds. The letter was also sent to the Ministers of Labour and Finance, the Director-General of the Budget Office, and the Accountant-General of the Federation.
Faleye explained that the deductions stemmed from a federal policy introduced in December 2023, requiring government-owned enterprises to remit half of their internally generated revenue (IGR) to the treasury. The policy, issued by Minister of Finance Wale Edun, aimed to increase government revenue and address the country’s fiscal deficit, a strategy strongly supported by President Bola Tinubu.
“Recall that the December 28, 2023, circular from the Federal Ministry of Finance mandated automatic deduction of 50% from the IGR of all federal enterprises,” Faleye stated.
He further clarified that employer contributions—being statutory liabilities—are not classified as government revenue and that, following a March 2024 directive from the Accountant-General, some of the previously deducted funds have been reversed. Deductions on investment income from these contributions are ongoing, but officials from the Budget Office and Finance Ministry have assured that no further deductions will be made.
“We have been assured that this issue will be resolved. In meetings in August 2025, both the Minister of Finance and the Director-General of the Budget Office committed that no further deductions will be made from contributions or investment proceeds,” the NSITF confirmed.
Notably, President Tinubu appointed Tanimu Yakubu as Director-General of the Budget Office in June 2024, following Ben Akabueze’s tenure expiration, and in March 2025, appointed Shamsedeen Ogunjimi as the new Accountant-General of the Federation.
NLC’s Response
The NLC acknowledged receipt of NSITF’s letter but indicated that its executive council would review it before deciding whether to proceed with the strike. Assistant General Secretary Christopher Onyeka emphasized that NSITF is a tripartite body owned jointly by workers, employers, and the government, and argued it should not be treated as a revenue-generating entity.
“The contributions to NSITF are meant to support workers in case of injury, not for government revenue,” Onyeka said. “Using these funds for fiscal purposes could compromise the agency’s ability to support workers when needed. It’s wrong for the Ministry of Finance to classify NSITF as a revenue-generating body.”
The union also pointed out that the deductions began under the current administration, and letters addressing the issue had been sent to the Finance Ministry and NSITF over a month ago. They received a response last Saturday. Onyeka stressed, “Protecting these funds is our responsibility.”
Regarding the alleged attempt by NSITF to amend the Employees’ Compensation Act in ways that could weaken workers’ protections, Faleye clarified that the proposals aim to improve enforcement, not diminish protections.
“As part of efforts to enhance operational efficiency, we have engaged with the National Assembly through annual retreats involving tripartite stakeholders. We suggested improvements to strengthen compliance and enforcement of the Employees’ Compensation Scheme,” Faleye explained.
He added that any legislative amendments are the purview of the legislature, and NSITF will participate in stakeholder consultations when the process advances. “We will advise all stakeholders to engage properly to ensure inclusive and beneficial laws,” he stated.
Concerns Over PenCom Board Reconstitution
The NLC also raised alarms about the non-constitution of the PenCom Governing Board, describing it as a serious breach of the law that jeopardizes oversight of workers’ retirement savings. The union warned that the current vacancy allows the government to exercise unilateral control over pension funds, risking mismanagement and political interference.
Section 19 of the Pension Reform Act 2014 mandates a 16-member PenCom Board, with appointments made by the President and confirmed by the Senate. The previous board was dissolved in June 2023, and although some reconstitution has occurred, the Board remains incomplete. The new Director-General, Omolola Oloworaran, was appointed in July 2024, but other key appointments are pending.
Stakeholders, including the Nigeria Employers’ Consultative Association (NECA), support the immediate reconstitution of the board, asserting that the delay undermines regulatory credibility and oversight. NECA’s Director-General, Adewale-Smatt Oyerinde, emphasized that pension assets are protected and cannot be diverted without trace.
PenCom confirmed that retirement savings accounts remain secure, with no pension assets lost or unaccounted for. PenCom’s Head of Corporate Communications, Ibrahim Buwal, assured that contributors receive regular statements and that all contributions are properly tracked and reported.
Call for Dialogue
Moses Igbrude, a consumer rights advocate, urged negotiation over strikes, emphasizing the importance of dispute resolution through dialogue. The NLC’s increasing vocality on issues like fuel subsidies, electricity tariffs, and wages indicates rising tension, and adding pension disputes to the list could escalate the situation.
While supporting the call for the prompt reconstitution of the PenCom board, NECA reiterated that contributions are protected and that the integrity of the pension system remains intact.