The National Pension Commission has introduced new capital requirements for pension fund administrators and pension fund custodians in Nigeria. The minimum capital threshold has been increased to N20 billion from N2 billion. This change is part of the Commission’s Pension Revolution 2.0 initiative, aimed at enhancing the stability and efficiency of the pension industry.
The new requirements apply to pension fund administrators with assets under management of N500 billion and above, as well as pension fund custodians with assets under custody of below N500 billion. Specialized pension fund administrators, such as those serving the Nigerian Police Force and universities, have distinct capital requirements. For instance, the Nigerian Police Force Pensions Limited must hold a minimum capital of N30 billion, while the Nigerian University Pension Management Company Limited is required to maintain N20 billion.
The Commission has set a deadline of December 31, 2026, for all affected operators to meet the new capital requirements. The revised capital thresholds will take effect immediately for new licensees, while existing operators will have until the specified deadline to comply. To ensure adherence, the Commission will monitor compliance every two years based on audited financial statements. Any shortfall must be rectified within 90 days to maintain operational licenses.
The need for revised capital requirements stems from significant developments in the pension fund custody business over the past 21 years. The operating landscape has evolved, necessitating a reassessment of the existing capital thresholds to ensure continued financial stability and effective risk management. By raising the capital requirements, the Commission seeks to strengthen the pension industry, ultimately benefiting pensioners and contributing to the overall growth of Nigeria’s economy.
The introduction of new capital requirements marks a significant step in the Commission’s efforts to enhance the pension industry’s stability and efficiency. As the deadline for compliance approaches, pension fund administrators and custodians must take necessary steps to meet the revised capital thresholds. The Commission’s monitoring and enforcement measures will help ensure that the industry operates with increased financial robustness, providing a secure foundation for pensioners and promoting confidence in the Nigerian pension system.