The Organised Private Sector of Nigeria, OPSN, has opposed the proposed increase in mandatory pension contributions being considered by the National Pension Commission, PenCom, warning that the move could negatively impact businesses, jobs and workers’ earnings.

OPSN, which comprises major business groups, including the Manufacturers Association of Nigeria, MAN, the Nigeria Employers’ Consultative Association, NECA, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, the Nigerian Association of Small and Medium Enterprises, NASME, and the Nigerian Association of Small Scale Industrialists, NASSI, described the proposal as a “Greek gift” to Nigerian workers.

In a joint statement issued on Thursday, the employers’ groups argued that although the proposal is being presented as a means of improving retirement benefits, it could ultimately hurt workers by weakening businesses and reducing employment opportunities.

The group said any reform aimed at improving retirement outcomes must take into account the sustainability of businesses that fund the pension system.

According to OPSN, Nigeria already operates a mandatory pension contribution rate of 18 per cent under the Pension Reform Act 2014, with employers contributing 10 per cent and employees contributing 8 per cent.

The group noted that the current rate is comparable to the average mandatory pension contribution level in member countries of the Organisation for Economic Cooperation and Development, OECD.

“Any proposal for an increase must be supported by Nigeria specific actuarial evidence demonstrating that the current rate is insufficient and that a higher rate would not undermine employment, wages, compliance and enterprise sustainability,” the statement said.

Speaking on the development, Director-General of NECA, Adewale-Smatt Oyerinde, said the proposal was both premature and counterproductive.

He argued that announcing a possible increase while consultations were still ongoing could undermine stakeholder engagement and make the process appear predetermined.

Mr Oyerinde stressed that previous pension contribution reviews were preceded by extensive consultations involving government, employers, organised labour and other stakeholders.

“Retirement security should not be pursued in a manner that threatens the businesses and jobs upon which the pension system itself depends,” he said

Also speaking, Director-General of MAN, Segun Ajayi-Kadir, warned that businesses were already grappling with high energy costs, rising interest rates, exchange-rate volatility, weak consumer demand and multiple regulatory obligations.

He said an increase in pension contributions could force companies to slow recruitment, delay salary reviews, reduce staff strength and transfer additional costs to consumers through higher prices.

“The proposed increase may directly raise employee contributions, but its wider consequences could still be borne by workers through weaker wage growth, reduced employment opportunities, job losses and higher prices of goods and services,” Ajayi-Kadir stated.

On his part, Director-General of NACCIMA, Sola Obadimu, cautioned against imposing additional financial obligations on businesses at a time when many firms were still struggling with economic challenges.

He said government policies should be carefully coordinated and assessed based on their cumulative impact on businesses, investment and employment.

Similarly, NASSI Director-General, Ifeanyi Oputa, warned that Micro, Small and Medium Enterprises, MSMEs, would be disproportionately affected by any increase in mandatory pension contributions.

The OPSN urged the Federal Government and PenCom to focus on policies that promote macroeconomic stability, business sustainability and job preservation rather than introducing measures that could increase costs for employers and workers.