Regulator offers PFAs and PFCs six-month relief, adds new clarifications on capital computation, AUM exclusions and stricter monitoring rules….
The National Pension Commission (PENCOM) has granted Licensed Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) an additional six months to comply with the revised minimum capital requirements for operators in the pension industry.
In an addendum issued this week to its earlier circular of September 26, 2025 (Ref: PenCom/INSP/Surv/2025/1255), the Commission announced that the compliance deadline has been shifted from 31 December 2026 to 30 June 2027.
The document, signed by A. M. Saleem, Director of the Surveillance Department, stated that the addendum provides “additional clarifications” to the new regulatory capital framework now guiding the sector.
Key Clarifications in PENCOM’s Addendum
The Commission introduced several adjustments designed to ease the transition for operators and refine the capital computation process:
- Statutory Reserve Fund (SRF) Now Included
The SRF, previously excluded from capital calculations, will now count as part of Shareholders’ Funds for PFAs across Categories A, B and C.
This inclusion is expected to significantly reduce capital adequacy pressure on operators preparing to meet the new threshold.
- Refinement of Assets Under Management (AUM) Surcharge
For Category A PFAs, certain funds will no longer be included when calculating the 1% capital surcharge on AUM:
- Fund V (Personal Pension Plan)
- Fund VII (Foreign Currency Fund)
- Approved Existing Schemes
- Additional Benefit Schemes
PENCOM says these exclusions ensure a more accurate reflection of risk and exposure by removing specialised pools that distort capital assessments.
Monitoring and Enforcement
The regulator reaffirmed its commitment to strict oversight. Compliance will continue to be assessed twice yearly through audited financial statements.
Where a PFA or PFC falls short, the operator will have 90 days from the notification date to remedy the deficiency.
PENCOM also clarified that the revised capital requirements remain immediately applicable for new license applicants.
Industry Impact
The extension provides much-needed relief for operators still adjusting to the sweeping reforms introduced in September, which raised the minimum capital requirement for PFAs to N20 billion, the most significant shift in over two decades.
Industry analysts say the changes, including the SRF inclusion and new AUM rules, strike a balance between regulatory strength and operational flexibility for an industry managing trillions of naira in pension assets.
All enquiries related to the update have been directed to PENCOM’s Surveillance Department.
Background: What the Reforms Entail
In the circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians,” PENCOM outlined new thresholds based on operator size:
- PFAs with AUM of N500 billion and above:
Must maintain N20 billion capital plus 1% of AUM above N500 billion. - PFAs with AUM below N500 billion:
Must maintain the minimum N20 billion capital requirement. - Special Purpose PFAs:
- NPF Pensions Limited: N30 billion
- Nigerian University Pension Management Company: N20 billion
The reforms aim to bolster financial resilience, enhance investor protection and strengthen the long-term stability of Nigeria’s pension industry.
