The National Pension Commission (PenCom) has issued a new directive increasing the minimum capital base for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs). The commission says this will strengthen the financial stability of Nigeria’s pension industry.
The announcement came in a circular signed by Mr Saleem Abdulrahman, Director of Surveillance at PenCom. The document explained that the new thresholds were set in line with the Pension Reform Act 2014 and global standards.
“PFAs will now be required to maintain capital levels proportionate to their Assets Under Management (AUM), while PFCs will align their capital thresholds with Assets Under Custody (AUC),” the circular read.
For PFAs, those with assets of ₦500 billion and above must keep a base of ₦20 billion plus 1% of any excess above ₦500 billion. PFAs with assets below ₦500 billion will need to maintain at least ₦20 billion.
New Rules for Pension Operators
PenCom added that special-purpose PFAs such as NPF Pensions Ltd will require ₦30 billion, while the Nigerian University Pension Management Company will need ₦20 billion. New PFA licences will also now attract a minimum capital of ₦20 billion.
The requirements for Pension Fund Custodians have also been raised. The old threshold of ₦2 billion, set in 2004, has now increased to ₦25 billion plus 0.1% of Assets Under Custody. New PFC licences will equally require a base of ₦25 billion.
According to PenCom, these adjustments were necessary to reflect the rapid growth of pension assets, the increasing complexity of operations, and the need for stronger technology, cybersecurity, and service delivery.
Operators have until December 31, 2026, to meet the new capital requirements. “Compliance will thereafter be monitored biennially using audited financial statements, with any identified shortfalls to be rectified within 90 days,” PenCom stated.
Nigerian pension assets now exceed a whopping ₦19 trillion.
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