The National Pension Commission (PenCom) has issued a fresh directive mandating that parent companies, subsidiaries, holding companies, and institutional shareholders of Licensed Pension Fund Operators (LPFOs) must possess a valid Pension Clearance Certificate (PCC) in order to operate legally within Nigeria’s pension ecosystem.
The regulatory measure was disclosed in a circular signed by A.M. Saleem, Head of PenCom’s Surveillance Department, and posted on the Commission’s website on Friday.
PenCom clarified that investors in pension fund operators (PFOs) are not exempt from the earlier rule barring LPFOs from engaging vendors or service providers without valid PCCs.
“The Parent Companies, Subsidiaries, Holding Companies and Institutional Shareholders of Licensed Pension Fund Operators shall possess valid Pension Clearance Certificates,” the Commission stated.
“They must ensure every vendor and service provider engaged complies with this requirement as a precondition for any Service Level or Technical Agreement.”
As of May 15, 2025, the Commission had issued 21,978 PCCs to employers across various sectors of the Nigerian economy. The certificate serves as proof that an employer is fulfilling its pension obligations under the law and is a prerequisite for eligibility for government contracts.
To ensure orderly implementation, PenCom has given LPFOs a six-month window to enforce compliance across their corporate structures and vendor networks, in accordance with Section 2 of the Pension Reform Act (PRA) 2014. This section mandates all employers in both public and private sectors to remit pension contributions no later than seven working days after salary payments.
The circular is part of broader efforts to curb the widespread non-compliance among employers, and enforce pension laws through increased audits, recovery initiatives, and sanctions against defaulters.
Bar on Non-Compliant Vendors and Investment Counterparties
PenCom’s expanded enforcement strategy includes:
- Prohibiting LPFOs from entering or renewing contracts with vendors or service providers lacking valid PCCs.
- Mandating that all counterparties, including those involved in commercial papers, bond issuances, and bank placements, present valid PCCs from their own vendors.
- Requiring a Compliance Attestation from every counterparty, affirming their enforcement of PCC rules across their vendor networks. This attestation must be updated annually and incorporated into the LPFOs’ investment documentation.
Additionally, LPFOs are required to integrate PCC compliance into:
- Vendor selection processes
- Internal governance structures
- Due diligence procedures
- Investment risk frameworks
FG Pushes Strategic Use of Pension Assets for Development
Meanwhile, during the 2025 Pension Industry Leadership Retreat held earlier this month, Finance Minister Wale Edun urged stakeholders to align pension fund investments with national development priorities, such as:
- Infrastructure
- Affordable housing
- Renewable energy
- Digital inclusion
With Nigeria’s pension assets surpassing ₦23 trillion, or approximately 8.6% of GDP, Edun called the sector a key engine for long-term growth.
“We must harness the transformative power of pension funds to support sustainable growth without compromising the security of retirees’ savings,” he said.
This latest directive by PenCom marks a significant step toward deepening transparency and accountability in Nigeria’s pension and financial services sectors. It underscores the regulator’s intent to create a fully compliant, interlinked ecosystem, where all stakeholders not just direct operators adhere to pension obligations.
