The National Pension Commission (PenCom) has increased the minimum capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to strengthen the financial stability of Nigeria’s pension industry.
A.M. Saleem, Director of PenCom’s Surveillance Department, announced the updated capital rules in a circular released on Friday.
Under the new guidelines, effective immediately, new PFAs must have a minimum capital base of ₦20 billion. Additionally, PFAs with pension assets under management (AUM) of ₦500 billion and above are required to maintain capital of ₦20 billion plus 1% of their AUM, while those below ₦500 billion maintain the ₦20 billion threshold.
For Pension Fund Custodians, the minimum capital requirement has been raised significantly to ₦25 billion plus 0.1% of assets under custody (AUC), up from the previous ₦2 billion set in 2004.
PenCom explained that the adjustment reflects the substantial growth and increased operational complexities within the pension fund custody business over the past two decades, including the need for advanced technology, cybersecurity, and staff welfare provisions.
Operators will have until December 31, 2026, to comply with the new capital requirements. PenCom will monitor compliance through biennial reviews of audited financial statements, with any capital shortfall to be rectified within 90 days.
This move is part of PenCom’s ongoing efforts to ensure a robust, resilient pension system capable of managing Nigeria’s growing pension assets and safeguarding contributors’ funds.
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