NECA threatens to halt employer contributions to NSITF, PenCom over governance concerns

The Nigeria Employers’ Consultative Association (NECA) has called on the Federal Government to immediately constitute the Boards of the Nigeria Social Insurance Trust Fund (NSITF) and the National Pension Commission (PenCom) to ensure effective governance, transparency, and accountability in managing employer contributions and workers’ pension funds.

Speaking in Lagos, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, expressed deep concern over the prolonged delay in appointing these Boards, warning that the lack of proper governance structures raises significant accountability concerns and uncertainty in fund administration.

According to Oyerinde, the NSITF Act of 1993 mandates the establishment of a Board to provide oversight and policy direction for social insurance contributions. Similarly, the Pension Reform Act (PRA) 2014 requires the PenCom Board to protect the integrity of the pension industry.

“Without these Boards, there is a glaring governance gap that weakens regulatory oversight and exposes NSITF and pension funds to risks,” he stated.

He emphasized that contributions to NSITF and PenCom are not government revenue but employer funds meant for specific purposes. The prolonged absence of governance structures, he warned, could lead to mismanagement and a loss of public trust.

Oyerinde noted that the failure to constitute these Boards contradicts international best practices upheld by organizations like the International Labour Organization (ILO), which stress effective governance in social security and pension management.

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

“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,” he added.

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.