New Pension Proposal By PenCom Will Trigger Job Loss, OPS

Organised Private Sector of (OPS) has warned that many businesses could fold up and thousands of jobs could be lost if the proposed pension hike is allowed to sail through.

Just the body warned against it could pushed members of OPS into closing down and retrenchment of workers if the National Pension Commission (PenCom) proceeds with its proposed increase in statutory pension contributions.

Describing the proposal as a “Greek gift” to Nigerian workers, the coalition said the planned increase of an additional three per cent mandatory yearly contribution to three per cent of the total wage bill, though presented as a measure to improve retirement benefits, would ultimately threaten employment, suppress wage growth, weaken business sustainability and escalate compliance risks.

The warning followed PenCom’s announcement that it plans to increase statutory pension contribution rates as part of the ongoing review of the Pension Reform Act (PRA) 2014.

PenCom Director General, Omolola Oloworaran, had announced the proposal during the 2026 Pension Consultative Forum for States, the Federal Capital Territory (FCT) and Licensed Pension Fund Operators (LPFOs) in Lagos.

According to her, the commission was engaging organised labour, employers, members of the National Assembly and other stakeholders on amendments to the law aimed at strengthening retirement security.

Reacting in a joint statement, the OPSN—comprising the Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigerian Association of Small and Medium Enterprises (NASME), Nigerian Association of Small Scale Industrialists (NASSI) and 25 other employer associations—called for withdrawal of
the proposal.

According to the group, businesses are already battling soaring energy costs, high interest rates, exchange-rate volatility, multiple taxes and levies, weak consumer demand and rising production costs, warning that imposing additional payroll obligations would force many firms to slow recruitment, delay salary reviews, cut jobs, increase outsourcing or pass higher costs to consumers.

OPSN maintained that although the proposal is intended to improve workers’ retirement savings, its broader economic consequences could leave employees worse off through weaker wage growth, reduced employment opportunities and rising inflation.

Under the current pension framework, employers contribute 10 per cent of an employee’s monthly emoluments while employees contribute eight per cent, bringing the total mandatory contribution to 18 per cent.

The OPSN insisted that any adjustment should be preceded by comprehensive actuarial, economic and employment impact assessments and emerge only after genuine consultations with employers, organised labour and other stakeholders.

Speaking on behalf of the group, Director-General of NECA, Adewale-Smatt Oyerinde, said while the OPSN supports efforts to strengthen Nigeria’s pension system, announcing an increase in contribution rates while stakeholder consultations were still ongoing was premature and undermined genuine social dialogue.

On the broader economic implications, Director-General of NACCIMA, Sola Obadimu, said imposing another statutory financial obligation on employers would contradict the Federal Government’s economic reform agenda.

Similarly, Director General of NASSI, Ifeanyi Oputa, warned that micro, small and medium-sized enterprises (MSMEs) would bear the heaviest burden.

The OPSN urged the federal government and PenCom to focus on taming inflation, preserving workers’ purchasing power and supporting enterprise sustainability before introducing additional statutory employment costs.

It also called for a comprehensive economic and employment impact assessment of the proposal, insisting that no adjustment should be made without transparent consultations and careful consideration of its effects on jobs, businesses and the wider economy.