PenCom Raises Capital Base for Pension Operators

By Oluwakemi Kindness

The National Pension Commission (PenCom) has announced a major increase in the minimum capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs).

It describes this as a strategic move to strengthen Nigeria’s pension industry and protect workers’ retirement savings.

In a circular signed by the Director of Surveillance, A.M. Saleem, PenCom said PFAs must now raise their minimum capital from ₦5 billion to ₦20 billion, while PFCs will see a jump from ₦2 billion to ₦25 billion.

Operators have been given until December 31, 2026, to comply with the new thresholds.

The Commission explained that the new model ties capital requirements to the scale of assets handled.

* PFAs with ₦500 billion and above in Assets Under Management (AUM) must hold a capital base of ₦20 billion plus 1% of their AUM.

* PFAs with less than ₦500 billion in AUM must maintain a flat ₦20 billion.

* PFCs will now require ₦25 billion, in addition to 0.1% of their Assets Under Custody (AUC).

PenCom noted that the capital base for custodians had remained unchanged since 2004, despite exponential growth in pension assets and rising operational complexity.

“The operating landscape of the PFC business has evolved significantly over 21 years, marked by exponential growth in custody assets and increased complexity of operational activities requiring deployment of robust technology, cybersecurity, and staff welfare,” the Commission explained.

It added that these developments made it necessary to reassess the adequacy of capital thresholds to ensure financial stability and effective risk management.

PenCom also revealed that, beyond the 2026 deadline, it will review the capital adequacy of all operators every two years, based on audited financial statements. Any identified shortfalls must be corrected within 90 days.

Industry watchers say the new requirements will push operators to be more financially resilient, ultimately boosting the safety of pension funds and giving workers greater confidence that their retirement savings are secure.