Pencom Sets December 2026 Deadline For PFAs To Recapitalise To N20bn

The National Pension Commission (PenCom) has acceptable December 31, 2026, arsenic the deadline for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to recapitalize to a caller superior threshold, it was learned.

In a circular issued by the pension manufacture regulator, titled ‘Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians,’ and cited by LEADERSHIP connected Saturday, PFAs are present required to upgrade their superior from the existent N5 cardinal to N20 cardinal wrong 14 months, portion PFCs volition upgrade their superior to N25 billion.

The pension manufacture started successful 2004 with a N2 cardinal superior basal but was raised to N5 cardinal successful 2021 earlier a caller summation to N20 billion, translating to a 300% summation successful capitalization.

The circular, signed by the Director of the Surveillance Department of PenCom, A. M. Saleem, stated that the committee has reviewed the minimum superior requirements for PFAs and PFCs pursuant to Sections 60(1)(b), 62(b), and 115(1) of the Pension Reforms Act (PRA) 2014.

To this end, PFAs with assets nether absorption (AUM) supra N500 cardinal volition necessitate N20 cardinal + 1% of (AUM-N500 billion), portion PFAs with AUM beneath N500 cardinal volition necessitate a minimum superior of N20 billion. For caller PFAs, the superior request for licensing is N20 billion.

The regulator added that the minimum superior for Special Purpose PFAs is arsenic follows: NPF Pensions Limited, N30 billion, and the Nigerian University Pension Management Company Limited, N20 billion.

Accordingly, PenCom stated that the revised minimum superior request for Licensed PFCs shall beryllium based connected Shareholders’ Funds, unimpaired by losses. Hence, the workout for PFCs volition beryllium determined arsenic follows: “N25 cardinal + 0.1% of AUC.” The minimum superior request for a caller PFC licence shall beryllium N25 billion, effectual immediately.

The timeline for compliance with the revised superior requirements for some Licensed PFAs and PFCs shall beryllium December 31, 2026.

Stating that the reappraisal aims to heighten fiscal stability, operational resilience, amended work delivery, and semipermanent viability of the PFAs and PFCs, Saleem noted successful the circular that the superior request was reviewed successful enactment with planetary champion practices, ensuring that superior is proportionate to the hazard vulnerability of the Pension Fund Operator.

“The caller exemplary aligns the superior request with the Pension Assets Under Management (AUM) and Assets Under Custody (AUC) of the PFAs and PFCs, respectively,” the regulator said.

Since the past reappraisal of the minimum superior request for PFA concern successful April 2021, Saleem said the pension manufacture has witnessed important changes successful presumption of the geometric maturation of assets nether absorption (AUM) and a analyzable operating environment, on with macroeconomic pressures requiring capable superior deployment.

The revised superior request would subsequently beryllium monitored by the committee each 2 years based connected the audited fiscal statements of the Pension Fund Operator, and immoderate shortfall shall beryllium made up wrong 90 days, it pointed out.