More than a decade after Nigeria privatised its power sector, tension is rising across the industry — not over tariffs or megawatts, but over pension contributions that workers say have been deducted from their salaries and left unremitted for as long as 82 months.
At the centre of the brewing crisis are allegations that some power generation and distribution companies deducted pension contributions from employees’ salaries without transferring the funds to their Retirement Savings Accounts, RSAs, as required by law.
For workers who have spent years climbing poles, maintaining turbines, and confronting customers’ frustrations during blackouts, the issue is not abstract. It directly affects their financial security in retirement.
Under the Pension Reform Act, PRA, 2014, both employers and employees must contribute to the Contributory Pension Scheme: employees contribute 8% of their monthly emoluments, and employers contribute at least 10%.
These contributions must be remitted within seven working days of salary payment into individual RSAs managed by licensed Pension Fund Administrators, PFAs.
The Act treats pension contributions deducted from salaries as funds held in trust for employees. Employers who fail to remit these deductions are in breach of the law and may face interest on unpaid contributions, fines, regulatory sanctions, and even legal action. Liquidity problems or financial challenges are not recognised as valid excuses under the law.
In the power sector, however, workers through organised labour allege that while pension deductions continue to appear on pay slips, the corresponding funds have not consistently reached their retirement accounts.
In some distribution companies — including Kaduna and Kano DISCOs — Organsed Labour claims arrears stretch as far back as 82 months.
82 months translates to nearly seven years of retirement savings — years during which the contributions should have been earning investment returns.
For many mid-career employees, such a prolonged gap could significantly weaken their long-term retirement prospects.
According to a the Acting General Secretary, the National Union of Electricity Employees, NUEE, Dominic Igwebike, “This is not just about delayed payments. These are funds already deducted from workers’ salaries. They belong to the workers.”
In a demand notice dated January 26, NUEE gave the Minister of Power a 21-day ultimatum to address the outstanding issues, particularly the alleged pension arrears.
Although the notice states that it is “not a threat,” it makes clear that workers are prepared to deploy all legitimate labour tools if their demands are not met.
Speaking with Vanguard, the Public Relations Officer, PRO, of Kano DISCO, Sani Bala, acknowledged the months of unpaid pension arrears. He however said the company and Organised Labour have been meeting to resolve the matter, adding “In fact, we have started defraying the liability gradually.
