More than a decade after Nigeria privatised its power sector, rising tension is threatening industrial harmony, not over tariffs or electricity supply, but over long-standing pension liabilities allegedly owed to workers.
Employees across the electricity value chain have raised alarm over pension contributions deducted from their salaries but reportedly left unremitted for periods stretching up to 82 months. Labour unions allege that some power generation and distribution companies deducted statutory pension contributions without transferring the funds into workers’ Retirement Savings Accounts (RSAs), as required by law.
For many workers, the issue goes beyond accounting discrepancies. It directly affects their long-term financial security after years of physically demanding and high-risk work, including maintaining power infrastructure, managing turbines, and facing public frustration during outages.
Under the Pension Reform Act 2014, employees are required to contribute 8 percent of their monthly emoluments, while employers must add a minimum of 10 percent. These funds are to be remitted within seven working days of salary payment to Pension Fund Administrators (PFAs). The law treats deducted pension funds as money held in trust, with penalties prescribed for non-compliance, including interest charges, fines, and legal action.
Despite these provisions, organised labour in the power sector claims that deductions continue to appear on workers’ payslips without corresponding credits to their RSAs. In some distribution companies, including Kaduna Electricity Distribution Company and Kano Electricity Distribution Company, unions allege that arrears date back nearly seven years.
Labour leaders warn that the failure to remit contributions deprives workers of years of potential investment returns and undermines confidence in the post-privatisation power sector, raising fears of possible industrial action if the issue is not urgently addressed.
