UBA ads

The National Pension Commission (PENCOM) has released the revised fee structure for the pensions industry. The revised fees are for the years 2018-2020 and cover charges by the commission, Pension Fund Administrators (PFAs), Pension Fund Custodian (PFCs) and the commission itself.

The circular also stratifies the charges across the multi-fund structure which is scheduled to begin on the 2nd of July, 2018.

The Pension Fund Administrators (PFAs) obtain funds from contributors and invest them. Pension Fund Custodians (PFC) are concerned with the safekeeping of the funds and assets. PENCOM is the industry regulator.

Fund 1

Fund 1 is an optional fund, that is interested contributors must write to take part.

Total fees effective July, 2018 are 2.25% comprising PFAs at 1.6%, PFCs at 0.40% and PENCOM at 0.25%. In 2019, estimated fees will drop slightly to 2.025%, comprising PFAs at 1.5%, PFCs at 0.30% and PENCOM at 0.225%.


Fund 2

Fund 2 is the default fund for contributors aged 49 and below.

Effective July 1, 2018, 1.925% will be charged, comprising PFAs at 1.4, PFCs at 0.30% and PENCOM at 0.225%. In 2019, a total of 1.79% will be charged comprising  1.3% by PFAs, 0.275% by PFCs and  0.215% by PENCOM. In 2020, a total of 1.65% will be charged by all parties comprising 1.2% by PFAs, 0.25% by PFCs and 0.2% by PENCOM.

Fund 3

Fund 3 is the default fund for contributors aged 50 and above.

Standard chartered

Effective July, 2018, a total of 1.8% will be charged comprising 1.3% by PFAs, 0.275% by PFCs, and 0.225% by PENCOM. From the 1st of January, 2019, 1.65 comprising 1.2% for PFAs, 0.25% for PFCs, and 0.20% for PENCOM. In 2020 1.5% comprising 1.1% for PFAs, 0.225% for PFCs and 0.175% for PENCOM.

Fund 4

This is for retirees.

Standard chartered

Effective July 2018, 7.5% will be charged comprising 5% by the PFA’s, 1.5% by the PFCs and 1% by PENCOM. Fees for 2019 and 2020 are not disclosed.


Fees charged on Funds I, II and III are asset-based fees. Fees charged on Fund IV are income based fees.

For Closed PFAs, a maximum total rate of 1.1% can be charged comprising 0.80% by the CPFA/PFA, 0.20% by the PFC and 0.1% by PENCOM. A closed PFA cannot receive funds from contributors other than employees of its parent organization.

For AES/Retirement Gratuity Funds, a total of 7.5% can be charged. This comprises 5% by the PFA, 1.5% by the PFC, and 1% by PENCOM. AES is an abbreviation for Approved Existing Schemes which are pension arrangements that were in place before the enactment of the current act.

From 2021, the fees shall be reviewed based on predetermined triggers.


The National Pension Commission (PENCOM) came into being in 2004 with the passage of the Pension Reform Act of 2004. PENCOM regulates, supervises and ensures effective performance of the pension industry and its operators.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.