The National Pension Commission (PenCom) has reviewed upward the capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), raising the minimum threshold from ₦2 billion to ₦20 billion.
In a circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians”, the Commission said the move aligns with global best practice and aims to strengthen the financial stability of operators in Nigeria’s Contributory Pension Scheme (CPS).
Under the new framework, PFAs with Assets Under Management (AUM) of ₦500 billion and above must maintain a capital base of ₦20 billion plus 1% of the excess AUM. Those with less than ₦500 billion in assets are required to meet the new ₦20 billion minimum. Special Purpose PFAs, such as NPF Pensions Limited, must hold ₦30 billion, while the Nigerian University Pension Management Company Limited will maintain ₦20 billion.
For Pension Fund Custodians, the capital requirement was raised from ₦2 billion, unchanged since 2004, to ₦25 billion plus 0.1% of Assets Under Custody (AUC). PenCom explained that the revision reflects the exponential growth in assets under custody, rising operational complexity, and emerging risks such as cybersecurity and technology deployment.
“The capital requirement was reviewed in line with global best practice, which ensures that capital is proportionate to the risk exposure of the Pension Fund Operator,” the Commission stated.
The revised capital thresholds apply immediately to new licenses, while existing operators have until December 31, 2026, to comply. PenCom said compliance will be monitored biennially through audited financial statements, with any shortfall to be rectified within 90 days.
Anchored in the Pension Reform Act 2014, the revision is expected to safeguard the long-term viability of pension operators, improve service delivery, and reinforce reforms in Nigeria’s 21-year-old Contributory Pension Scheme.
