Nigeria’s organised private sector has opposed the Federal Government’s proposal to increase mandatory pension contributions, warning that the move could raise business costs, threaten jobs and weaken the economy.

According to The PUNCH, the Organised Private Sector of Nigeria (OPSN), which includes 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) and the Nigerian Association of Small Scale Industrialists (NASSI), described the proposal as “premature and counterproductive”.

The groups were reacting to comments by the Director-General of the National Pension Commission (PenCom) on plans to increase mandatory pension contributions beyond the current 18 per cent and introduce an additional annual contribution equivalent to three per cent of employers’ total wage bills.

The OPSN argued that Nigeria’s existing pension contribution rate of 18 per cent, made up of 10 per cent from employers and eight per cent from employees under the Pension Reform Act 2014, is already comparable to international standards.

The employers insisted that any increase should first be backed by Nigeria-specific actuarial evidence proving the current rate is inadequate without harming employment, wages, compliance and business sustainability.

NECA Director-General, Adewale-Smatt Oyerinde, said announcing a higher contribution rate before consultations with stakeholders were concluded undermined the purpose of the engagement process.

He noted that previous pension reforms were preceded by extensive discussions involving government, employers, organised labour and other stakeholders, adding that any adjustment should be supported by economic and employment impact assessments.

MAN Director-General, Segun Ajayi-Kadir, warned that businesses were already struggling with rising energy costs, high interest rates, exchange rate volatility, weak consumer demand and increasing production expenses.

He said additional statutory payroll costs could force companies to reduce recruitment, delay salary reviews, cut jobs, outsource more services, suspend expansion plans or pass higher costs to consumers through increased prices.

NACCIMA Director-General, Sola Obadimu, said introducing new financial obligations at a time when businesses were recovering from economic pressures could undermine broader government reforms aimed at improving competitiveness.

Meanwhile, NASSI Director-General, Ifeanyi Oputa, cautioned that micro, small and medium-sized enterprises would bear the greatest burden because many already operate on thin profit margins and face multiple taxes and rising operating costs.

The OPSN urged the Federal Government and PenCom to prioritise macroeconomic stability, inflation control, enterprise sustainability and job creation before introducing additional pension obligations.

The employers stressed that while they support reforms to strengthen retirement security, any increase should emerge from transparent consultations with stakeholders and only after economic conditions improve.

PenCom has said the proposed changes form part of wider reforms to strengthen retirement security and that consultations with organised labour, employers, pension operators and the National Assembly are ongoing before any amendment to the Pension Reform Act 2014 is presented for legislative approval.