The Federal Government is racing to avert a nationwide strike after the Nigeria Labour Congress (NLC) raised alarm over deductions from the Employees’ Compensation Scheme, demanding refunds and reforms.
The deductions, which the NLC claimed amounted to 40 percent of workers’ compensation contributions, were reportedly transferred to the federal treasury, sparking outrage among labour leaders who insisted the funds must remain sacrosanct.
Responding to the outcry, the Managing Director of the Nigeria Social Insurance Trust Fund (NSITF), Oluwaseun Faleye, acknowledged that deductions had occurred. He explained in a letter dated August 16, 2025, that the withdrawals were in line with a December 2023 fiscal circular compelling government-owned agencies to remit 50 percent of their internally generated revenue.
However, Faleye said employer contributions were wrongly classified under the policy but had since been exempted following directives by the Accountant-General of the Federation in March 2024. Refunds, he noted, were ongoing, while authorities had pledged to stop future debits.
“We have been assured… no further deductions would be made from either contributions or investment proceeds,” Faleye assured.
But the NLC is weighing its options. “The contributions to NSITF are intended to compensate workers in the event of injury. They are not government revenue and should not be used for fiscal purposes,” said Assistant General Secretary, Christopher Onyeka.
The union also demanded the immediate constitution of the PenCom board, dissolved since June 2023, warning that continued delay threatens pension fund oversight.
Experts, including the Centre for Pension Rights Advocacy and the Nigeria Employers’ Consultative Association (NECA), supported the NLC’s stance, stressing that pension savings are deferred wages—not government assets.
Despite the controversy, the NSITF insisted that workers’ funds remain “ring-fenced” and intact, describing the deductions as an unintended effect of a general revenue policy.