The National Pension Commission (PenCom) has announced a major upward review of capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), setting new thresholds of N20 billion and N25 billion respectively. Operators are required to comply with the new regime by December 31, 2026.
The directive was contained in a circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians”, signed by Alhaji A. M. Saleem, Director of Surveillance at PenCom.
Under the new framework, PFAs must raise their capital base from the current N5 billion to N20 billion within the next 14 months. For PFAs managing assets above N500 billion, the requirement is N20 billion plus 1% of the excess over N500 billion. Special Purpose PFAs such as NPF Pensions Limited are to meet a higher benchmark of N30 billion, while the Nigerian University Pension Management Company Limited must meet N20 billion.
Similarly, the revised threshold for PFCs is set at N25 billion plus 0.1% of Assets under Custody (AuC), with new license applicants required to meet the N25 billion minimum immediately. The requirement, PenCom stated, will be based strictly on shareholders’ funds unimpaired by losses.
The pension regulator explained that the review was carried out in line with the Pension Reform Act (PRA) 2014 and global best practices, ensuring that capital is aligned with the risk exposure of pension operators. The objective, according to Saleem, is to strengthen financial stability, improve operational resilience, enhance service delivery, and secure long-term industry sustainability.
Since the last upward review in April 2021—which raised PFAs’ capital base from N1 billion to N5 billion—the industry has recorded significant growth in Assets under Management (AuM) alongside a more challenging macroeconomic environment. PenCom said these developments made it necessary to adopt a more robust capital framework.
Going forward, the commission will monitor operators’ compliance with the new rules every two years based on audited financial statements. Any shortfalls must be rectified within 90 days.
