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Labour Union demands 15% employee contribution in pension amendment

By on August 21, 2013

The Vice President, Nigeria Labour Congress, Isa Aremu, has said that the group is demanding a total contribution of 15% from employers, towards employees’ pension plan.

While discussing the proposed amendment of the 2004 pension act on Business Morning, he said the union is impressed by the proposal of an upward review of pension contributions to 20%, 12% by the employer and 8% by the employee.

However, Mr Aremu said the labour congress received the information with ‘mixed feelings’ because “the old rate of 7.5% by both employee and employer, were ‘inequitable’.

“We thought it was grossly unfair for you to ask employers and employees to pay the same rate” as opposed to the 2:1 ratio contribution system operated worldwide.

The new proposed amendment has increased the rate of the employer’s contribution. “This is quite equitable” although the union has advocated for a 25% rate which mandates the employer to pay 15% and employee 10%.

“We strongly believe that for this pension scheme to be sustainable, and to be fair to the working people, it must guarantee income adequacy,” he said.

The current 7.5% rate would not get the worker enough funds to cope with life after retirement.

 
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