NSITF moves to avert strike, assures AGF will refund workers; NLC reviews response

The Federal Government has agreed to refund deductions made from the Employees’ Compensation Scheme, managed by the Nigeria Social Insurance Trust Fund (NSITF), in a bid to ease growing tensions with the Nigeria Labour Congress (NLC), which had threatened a nationwide strike.

The NLC recently accused the government of diverting 40 percent of NSITF contributions into the federal treasury. The labour body described the action as a violation of workers’ social protection rights and demanded an immediate refund as well as the urgent reconstitution of the National Pension Commission (PenCom) board. It warned that failure to comply could trigger a general strike.

The Employees’ Compensation Scheme provides financial support for workers affected by workplace injuries, illness, disability, or death. The fund is sustained entirely by employer contributions, typically pegged at one percent of monthly payroll, without any deductions from workers’ salaries.

NSITF’s Position

In a letter dated August 16, 2025, and addressed to the NLC, NSITF Managing Director, Oluwaseun Faleye, admitted that deductions had been made from workers’ compensation contributions. However, he clarified that the deductions were not diversions but a result of a federal policy introduced in December 2023 requiring government-owned enterprises to remit 50 percent of their internally generated revenue to the treasury.

The directive, issued by Finance Minister and Coordinating Minister of the Economy, Wale Edun, was aimed at boosting federal revenue and reducing budget deficits under President Bola Tinubu’s fiscal reforms.

Faleye, however, noted that the Accountant-General of the Federation (AGF) had in March 2024 stopped deductions from employers’ contributions, and part of the previously deducted funds had already been reversed. While deductions on investment income remain ongoing, NSITF assured that discussions with the Ministry of Finance and the Budget Office were underway to permanently resolve the issue.

“We have been assured that this matter will be resolved. Both the Minister of Finance and the Director-General of the Budget Office have pledged that no further deductions will be made from contributions or investment proceeds,” the agency stated.

President Tinubu had earlier appointed Tanimu Yakubu as Director-General of the Budget Office in June 2024, and Shamsedeen Ogunjimi as Accountant-General of the Federation in March 2025.

NLC’s Response

The NLC confirmed receiving NSITF’s letter but said its executive council would review the content before taking a decision on the planned strike.

Assistant General Secretary, Christopher Onyeka, stressed that NSITF was a tripartite agency owned by workers, employers, and the government, and should not be categorized as a revenue-generating agency.

“The contributions to NSITF are for compensating workers in times of injury. They are not government funds and must not be tampered with. Diverting them undermines the agency’s ability to fulfil its mandate,” Onyeka said.

He also disclosed that the union had written to both the Ministry of Finance and NSITF weeks earlier but only received a formal reply on Saturday.

Concerns Over Law Amendments

Reacting to allegations that NSITF was pushing to amend the Employees’ Compensation Act to weaken workers’ rights, Faleye said the proposals were only aimed at improving compliance and strengthening enforcement against defaulting employers.

“As an organisation, we cannot make or stop laws. That authority rests with the National Assembly. We have only made recommendations during stakeholder retreats, with the aim of strengthening the compensation scheme,” he said.

PenCom Governing Board Dispute

The NLC also raised alarm over the federal government’s delay in reconstituting the PenCom board, which it said violates the Pension Reform Act and weakens oversight of workers’ retirement funds.

The Act provides for a 16-member board, including representatives of labour, pensioners, and employers. However, since the dissolution of parastatal boards on June 16, 2023, the PenCom board remains incomplete, with only the Director-General, Omolola Oloworaran, confirmed by the Senate in November 2024.

The Centre for Pension Rights Advocacy and the Nigeria Employers’ Consultative Association (NECA) also backed NLC’s position, insisting that non-constitution of the board undermines regulatory credibility.

Workers’ Funds Remain Secure – FG

Despite the controversy, NSITF reassured workers that their contributions are “ring-fenced assets” and remain intact. Similarly, PenCom confirmed that all retirement savings accounts under the Contributory Pension Scheme remain secure, with contributors receiving regular statements.

“No pension fund is missing. All accounts are audited and published as required by law,” PenCom’s spokesman, Ibrahim Buwal, stated.

Meanwhile, labour leaders say they will continue consultations and insist that both workers’ compensation and pension funds must remain fully protected from government interference.