PenCom raises capital requirements for pension companies

PenCom raises capital requirements for pension companies

Nike Popoola

The National Pension Commission (PenCom) has announced an upward review of the minimum capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs).

In a circular issued on Friday, September 26, 2025, the Commission said the review was necessary to strengthen the financial stability, operational resilience, and long-term sustainability of licensed pension operators, in line with global best practices.

According to the circular signed by the Director of Surveillance, A. M. Saleem, PFAs will now be required to maintain minimum shareholders’ funds, unimpaired by losses, stratified by asset size.

Under the new structure, PFAs with Assets Under Management (AUM) of ₦500 billion and above will require ₦20 billion plus 1% of the excess AUM above ₦500 billion.
PFAs with less than ₦500 billion AUM must maintain ₦20 billion, while special purpose PFAs such as NPF Pensions Limited and the Nigerian University Pension Management Company Limited will need ₦30 billion and ₦20 billion respectively.

Similarly, PenCom raised the minimum capital requirement for PFCs from the ₦2 billion set in 2004 to ₦25 billion, plus 0.1% of their Assets Under Custody (AUC).
The Commission noted that the reforms were driven by the exponential growth of the pension industry, which now manages trillions of naira in retirement savings, as well as increasing macroeconomic and operational challenges requiring operators to deploy more resources into technology, cybersecurity, and improved service delivery.

All licensed PFAs and PFCs are expected to comply with the revised capital thresholds by December 31, 2026. PenCom further disclosed that compliance will be monitored every two years, based on audited financial statements, and any capital shortfall must be remedied within 90 days.

The Commission also announced that the minimum capital requirement for any new PFA license is ₦20 billion, while new PFC licenses will now attract a ₦25 billion capital threshold.

PenCom maintained that the measures were critical to safeguarding pension assets, which have grown steadily since the Contributory Pension Scheme (CPS) was introduced 21 years ago.