The National Pension Commission (PenCom) has announced an increase in the minimum capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), raising the threshold from ₦2 billion to ₦20 billion.
The move, according to the commission, is designed to reinforce financial stability, operational resilience, and long-term sustainability within Nigeria’s pension industry.
In a circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians,” PenCom said the new framework aligns capital adequacy with the scale of assets managed by operators, in line with global best practice.
Under the revised structure, PFAs with Assets Under Management (AUM) of ₦500 billion and above must maintain a capital base of ₦20 billion plus one percent of the excess AUM beyond ₦500 billion. For those managing assets below ₦500 billion, the requirement is set at ₦20 billion. Special categories include NPF Pensions Limited, which will now maintain ₦30 billion, while the Nigerian University Pension Management Company Limited is set at ₦20 billion.
For PFCs, which have not seen a review of their capital base since 2004, the new requirement has been pegged at ₦25 billion plus 0.1 percent of Assets Under Custody (AUC). New applicants seeking PFA or PFC licenses must meet the ₦20 billion and ₦25 billion thresholds respectively with immediate effect.
PenCom explained that the decision was informed by industry developments since the last review in April 2021. It noted that the pension sector has witnessed exponential growth in assets, increasing operational complexity, and rising macroeconomic pressures that demand stronger capitalisation and technology-driven operations.
“The review is to enhance financial stability, operational resilience, improve service delivery, and ensure the long-term viability of PFAs and PFCs,” the circular stated. “It aligns capital requirements with risk exposure, given the geometric growth of pension assets and evolving market realities.”
The commission emphasised that the reforms are crucial to sustaining the achievements of the Contributory Pension Scheme (CPS) after 21 years, while also supporting broader pension reforms aimed at strengthening the industry’s response to macroeconomic headwinds.
Operators have until December 31, 2026, to comply with the new requirements. PenCom added that compliance will be monitored every two years using audited financial statements, with any shortfall expected to be covered within 90 days.
The commission also underscored that the revised thresholds will enable PFAs and PFCs to deploy adequate resources for technology, cybersecurity, staff welfare, and service delivery key areas it described as increasingly critical in the industry’s operating landscape.
