The National Pension Commission of Nigeria (PenCom) has announced a substantial increase in the minimum capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs). The threshold for PFAs has risen from ₦2 billion to ₦20 billion, while PFCs must now hold ₦25 billion plus 0.1 % of assets under custody. According to a PenCom circular, the revision aims to strengthen financial stability and operational resilience in the pension industry and to align capital requirements with global best practices, ensuring that capital is proportionate to the risk exposure of pension fund operators.
For PFAs with assets under management (AUM) of ₦500 billion or more, the capital base must be ₦20 billion plus 1 % of the excess AUM beyond ₦500 billion. The new requirements apply to all PFAs, including Special Purpose PFAs, which must hold a minimum of ₦30 billion. The Nigerian University Pension Management Company Limited is required to maintain a capital base of ₦20 billion. PenCom emphasized that the capital requirement was reviewed to match the risk exposure of pension fund operators and to support their long‑term viability.
The increase responds to the exponential growth in assets under custody and the rising complexity of pension operations, including technology deployment, cybersecurity, and staff welfare. PenCom noted that the operating landscape for PFCs has evolved significantly over the past 21 years, underscoring the need to reassess the adequacy of existing capital thresholds.
The revised capital requirements take effect immediately for new licences, while existing operators have until 31 December 2026 to comply. PenCom will monitor compliance biennially based on audited financial statements, and any shortfall must be rectified within 90 days. Anchored in the Pension Reform Act of 2014, the review seeks to improve service delivery and ensure the sustainability of the Contributory Pension Scheme, now in its 21st year.
These heightened capital requirements are expected to enhance financial stability and operational resilience across Nigeria’s pension industry, supporting the long‑term viability of the Contributory Pension Scheme and improving service delivery to pensioners. With the new standards in place, PenCom remains poised to play a critical role in regulating and supervising the nation’s pension sector.
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