The National Pension Commission (PENCOM) has officially extended the deadline for compliance with its revised minimum capital requirements for Licensed Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), granting existing operators an additional six months to meet the new standards.
In an addendum released this week to its earlier circular dated 26 September 2025 (Ref: PenCom/INSP/Surv/2025/1255), the Commission announced that the new compliance deadline is now set for 30 June 2027, superseding the previous deadline of 31 December 2026.
“This Addendum provides additional clarifications to the revised regulatory capital requirements,” stated the addendum signed by A. M. Saleem, Director of the Surveillance Department at PENCOM.
Key Clarifications in the Addendum
The addendum outlines several important updates to the capital computation framework:
- Inclusion of Statutory Reserve Fund (SRF): The SRF, which was previously excluded, will now be counted as part of the Shareholders’ Funds for all categories of PFAs (A, B, and C). This move is expected to ease capital adequacy pressures on operators.
- Exclusion of Specific Funds from AUM Calculations: For PFAs under Category A, the following funds will be excluded when calculating the 1% capital surcharge based on Assets Under Management (AUM):
- Fund V (Personal Pension Plan)
- Fund VII (Foreign Currency Fund)
- Approved Existing Schemes
- Additional Benefit Schemes
These exclusions aim to refine the capital surcharge mechanism and ensure a more accurate reflection of risk exposure.
Monitoring and enforcement
PENCOM reiterated its commitment to rigorous oversight. The Commission will continue to monitor compliance biannually through audited financial statements. Any shortfall in meeting the capital requirements must be rectified within 90 days of notification.
“The revised capital requirements remain effective immediately for new licenses,” the Commission emphasized, reinforcing its stance on maintaining financial stability and integrity within the pension sector.
Industry implications
The extension offers breathing room for existing PFAs and PFCs, many of whom have been grappling with the implications of the revised capital thresholds. By incorporating the SRF and refining AUM calculations, PENCOM appears to be balancing regulatory rigor with operational flexibility.
All inquiries regarding the addendum are to be directed to the Surveillance Department, as signed by Director A. M. Saleem.
What you should know
In September, PENCOM announced a sweeping revision to the capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), raising the minimum threshold for PFAs to N20 billion.
- The move, aimed at strengthening financial stability and operational resilience, marks one of the most significant regulatory shifts in Nigeria’s pension industry in over two decades.
- In a circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians”, PenCom stated that PFAs with Assets Under Management (AUM) of N500 billion and above must now maintain a capital base of N20 billion plus 1% of the excess AUM beyond N500 billion.
- PFAs with AUM below N500 billion are also required to meet the new N20 billion minimum. Special Purpose PFAs, such as NPF Pensions Limited, must hold N30 billion, while the Nigerian University Pension Management Company Limited is required to maintain N20 billion.
