What is NSITF (Nigeria Social Insurance Trust Fund)?

The Nigeria Social Insurance Trust Fund is a proactive and employee dedicated government institution committed to the welfare of employees in the event of work related accidents and injuries.

Over the past fifty years, the NSITF has evolved from a Provident Fund Scheme to a Social Insurance Scheme and, currently the Employees’ Compensation Scheme.

NSITF applies to every employer and employee in the public and private sectors. Employers will, therefore, contribute 1% of employees’ monthly payroll to the NSITF in the first two years of commencement of the Act. (Payroll means remuneration defined in the Act, excluding pension contributions, bonuses, overtime payments, and one-off payments such as 13th-month income). Thereafter, NSITF Board will perform a risk assessment to classify contributions on workers’ exposure and estimate the appropriate payments. This contribution is not a deduction from an employee’s monthly salary. Rather, it is a statutory payroll contribution by an employer.

Contributory Pension Scheme

Under the provision of the NSITF Act, 1993 all employers of labour in the Private Sector registered under the Companies and Allied Matters Act (CAMA) 1990, either as companies or partnerships, regardless of the number of their employees or were sole businesses with a workforce of not less than five employees, were required to register as members of the NSITF Scheme and remit their contributions monthly. It was mandated to provide the following benefits:
• Retirement pension benefit
• Survivors benefit
• Retirement grant
• Death grant
• Invalidity benefit
• Invalidity grant and such other benefits as may be approved from time to time by the Board.

The NSITF scheme was a defined benefit scheme which enabled contributions to enjoy pension and grants far beyond their contributions. The new rate of contribution, which was effected after an actuarial analysis of the scheme, took effect from January, 2002. It was from the cumulative contribution that the cost of administering the Fund was funded and the surplus was invested in safe, liquid and profitable investment to generate income for the payment of benefits. Registered members were permitted, subject to certain qualifications, to receive pension and grants as benefits in the event of attaining the retirement age of 60 (or 55), invalidity or death, which would be paid to them or their survivors as the case might be.

In order to deliver on its mandate, the Fund was given operational autonomy in order to;
evolve a more result-oriented and accountable management based on performance contracts;
strengthen financial/accounting controls;
ensure financial solvency through effective cost recovery, cost control and prudent management.
remove bureaucratic bottlenecks and political interference through clear role definitions between the supervising Ministry, the Board and the Management.

NSITF scheme was funded with contributions from the registered members of the scheme. The cost of administration of the scheme by the NSITF Board (capital and recurrent) were borne by the Fund, as the scheme plan allowed between 5-25% of contributions received to meet administrative costs (normally higher at inception of scheme and progressively lower as the scheme matures). NSITF was also empowered under the Act to carry on business of profitable nature, investment, etc. The financial provisions of the NSITF Act (Ss 27 & 23) permits NSITF to do as outlined above.


Pension Reform Act (PRA)

Following the enactment of the PRA, NSITF ceded its pension’s business. In compliance with the Section 42 of the PRA 2004, NSITF incorporated a subsidiary company, Trustfund Pensions Plc in partnership with other stakeholders viz: MainStreet Bank(Afribank Plc), Denham Management Limited, Nigeria Employers Consultative Association, Nigeria Labour Congress and Trade Union Congress in 2004. NSITF owns majority shares of Trustfund Pensions Plc which was licensed by the National Pension Commission in December 2005 and initiated operation in January 2006 having transferred assets in excess of N54billon to the TrustFund Pension Plc.

The Pension Reform Act 2004 (Section 71(2) redefined the mandate of the Fund to the provision of “Social Security Insurances services other than pension.”

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Employees Compensation Act

The Employees Compensation Act was passed into Law in December 2010, to give statutory assistance to the mandate given by section 71(2) of the PRA to NSITF for the provision of Social Security Insurance Services by operating the ECS.

The conversion between the NSITF Scheme and the commencement of the Employees Compensation Scheme in 2011 was a period that was devoted to mainly strategizing and ensuring that the Employees Compensation Scheme became a reality.

The objectives of the Act are:

  • To provide for an open and fair system of guaranteed and adequate compensation for all employees or their dependents for any death, injury, disease or disability arising out of or in the course of employment;
  • To provide rehabilitation to employees with work disability as much as possible;
  • To launch and maintain a solvent compensation fund managed in the interest of employees and employers;
  • To provide for fair and adequate assessments for employers;
  • To provide an appeal procedure that is simple, fair and accessible, with minimal delays;
  • To combine efforts and resources of relevant stakeholders for the prevention of workplace disabilities, including the enforcement of occupational safety and health standard.

The funding of the scheme is based on 1% of payroll of employers remitted to the Fund.

In addition, the Fund, under Section 71 of the Pension Reform Act, 2004, is to provide “every contributing citizen Social Security Insurance Services other than Pension in accordance with the NSITF Act, 1993”. The Fund has commenced the process of putting in place the necessary infrastructure to implement Social Security Benefit to the aged, unemployed, child welfare and the physically challenged.

To this end, a bill for an amendment to the provisions of the NSITF Act to provide basic social security services to all Nigerians is before the National Assembly for passage into law.

Based on the outcome of the report of the committee chaired by former Head of state which underscored the urgency for the need to provide Social Security to vulnerable Nigerians. NSITF has commenced putting in place the necessary infrastructure to ensure the collection of data of all the categories of those entitled to Social Security Benefit.



At the moment, cases of industrial accidents, injuries and diseases are being promptly treated as they are reported, in full compliance with the provisions of the Act and to the satisfaction of the stakeholders in pursuance of the following objectives of the ECA:

  • To provide a fair, guaranteed and adequate compensation for all insured employees in case of any injury, disease, disability or death arising out of, or in the course of employment.
  • To rehabilitate employees who suffer work – related injuries, disabilities, or occupational diseases.
  • To establish and maintain a solvent compensation fund, which will be managed in the interest of both employees and employers.
  • To grant for a fair and adequate assessment of employers’ risk rating and ensure appropriate contribution is paid.
  • To offer a claims procedure that is simple, fast and less cumbersome for the injured persons, or their dependents in case of death.
  • To promote the enforcement of occupational safety and health standards in the workplace.

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