PenCom Raises Minimum Capital Requirements for PFAs and PFCs

The National Pension Commission (PenCom) has announced a significant upward review of the minimum capital requirements for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs). The new requirements, issued in a circular dated 26 September 2025, are designed to enhance the financial stability, operational resilience, and long-term sustainability of licensed Pension Fund Operators.

Why the Review?

According to PenCom, the review was carried out in line with global best practices and the evolving realities of Nigeria’s pension industry. Over the past two decades, the industry has witnessed rapid growth in pension assets under management (AUM) and assets under custody (AUC).

The Commission stressed that stronger capital bases are necessary to:

• Support the continued achievements of the Contributory Pension Scheme (CPS) after 21 years of existence.
• Strengthen operators’ capacity to withstand macroeconomic pressures.
• Improve service delivery to Retirement Savings Account (RSA) holders.
• Ensure effective risk management and long-term viability of the system.

Revised Capital Requirements

For PFAs
The new minimum capital requirement for PFAs is stratified based on their size and scope:

• Category A (PFAs with AUM of ₦500 billion & above): ₦20 billion + 1% of (AUM – ₦500 billion).
• Category B (PFAs with AUM below ₦500 billion): ₦20 billion.
• Category C (Special Purpose PFAs): NPF Pensions Limited – ₦30 billion and Nigerian University Pension Management Company Limited – ₦20 billion.

The minimum capital requirement for any new PFA licence is now set at ₦20 billion with immediate effect.

For PFCs
This is the first major adjustment since 2004, when the threshold was set at ₦2 billion. Under the new framework, the capital requirement for PFCs will be based on shareholders’ funds as follows:

₦25 billion + 0.1% of AUC.

For any new PFC licence, the minimum capital requirement is ₦25 billion with immediate effect.

Compliance Timeline

Operators are required to comply with the revised capital requirements on or before 31 December 2026. Thereafter, PenCom will review compliance every two years based on audited financial statements. Any shortfall must be made up within 90 days.

What This Means for the Industry

This policy shift underscores PenCom’s commitment to ensuring that the pension industry remains robust, secure, and better equipped to serve contributors and retirees. Stronger capitalized PFAs and PFCs will be better positioned to deploy advanced technology, strengthen cybersecurity, attract top talent, and withstand economic shocks.

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