The Nigeria Social Insurance Trust Fund (NSITF’) says some employers are sabotaging its operations by under-declaring the salaries and staff strength of their organisations.
The Managing Director of NSITF, Oluwaseun Faleye disclosed this on Sunday in Abuja.
“We have seen cases where organisations report lower salaries or fewer employees just to reduce their contributions.
‘We are addressing this through advocacy and education, because under-declaring salaries ultimately harms workers.
“Benefits are calculated based on reported earnings. So, if an employer declares ₦100,000 instead of ₦200,000, compensation will also be based on the lower figure.
“That shortchanges the employee, sometimes significantly.
“We have also noticed cases where companies fail to update their staff registers after employee turnover,” he said.
Faleye also identified low awareness of NSITF operations as another major challenge of the Fund.
He said many people are still unaware of the Employees’ Compensation Scheme (ECS) and its benefits.
“Each time I speak to new groups about the scheme, they are often surprised by what they have been missing,’ he said.
The ECS is governed by the Employees’ Compensation Act (ECA) 2010, which establishes a mandatory social insurance program for most public and private sector employees.
The Act mandates employers to register with the NSITF and contribute to an Employee Compensation Fund to provide compensation for work-related death, injury, disease, or disability.
The scheme aims to provide adequate compensation, vocational rehabilitation, and a social safety net for employees and their dependants.
Faleye said another biggest internal challenge facing the organisation was the manual processes that still existed within the system.
He said the manual operation processes was slowing the Fund down and making it less agile.
“We are addressing this by digitalising our operations, from online registration portals in the compliance department, to digital workflows in our legal and claims departments.
“Once completed, this transformation will make us far more responsive and efficient,” he said.
Speaking on the ongoing amendment to the NSITF Establishment Act, Faleye said, they looked forward to engaging constructively with the National Assembly to ensure that whatever emerged from the process, ultimately benefits Nigerian workers.
“For us, what matters is that the amendment provides greater enforcement powers, ensuring employers to treat compliance as mandatory, not optional.
“It should also strengthen our governance framework for better operational efficiency,” he said.
The amendment is being championed by the Senate Committee on Labour and Employment chaired by Sen. Diket Plang and has passed second reading in the Senate.
The amendment reportedly seeks to reduce the representation and influence of employers and workers, who are main contributors to the Fund, on the NSITF’s governance board.
Critical stakeholders, including the Nigeria Labour Congress, had faulted the ongoing amendment, contending that it would increase government control over the NSITF via a board dominated by political appointees rather than tripartite stakeholder representation.
The stakeholders warned that the amendment could weaken transparency, accountability and good governance mechanisms for the Fund.
