The National Pension Commission (PenCom) has opened the recapitalisation book four years after, fresh capital mandates for Pension Fund Administrators and Pension Fund Custodians are now required. Under the revised system announced over the weekend, PFAs managing assets above N500bn must hold a minimum capital of N20bn, plus 0.1% of funds exceeding that threshold. Those with assets below N500 billion are required to maintain a flat N20 billion. For PFCs, the minimum capital has been raised to N25 billion plus 0.1% of assets under custody. New entrants into the sector will also need to meet these thresholds before securing licences. The compliance deadline has been set at December 31, 2026.
The new development announced by PenCom captured that it, would strengthen financial stability and safeguard the long-term sustainability of the industry and it aligns capital requirements with the size of assets under management and custody, ensuring that operators maintain buffers proportionate to their risk exposure.
The commission stated that the measure was necessary to protect operators against macroeconomic shocks, enhance service delivery, and safeguard contributors’ savings.
The commission noted that the recapitalisation aligns with international best practice and reflects the realities of a sector that has grown geometrically since the last capital review in 2021. Nigeria’s Contributory Pension Scheme (CPS), now in its 21st year, has expanded to trillions of naira in assets, attracting global interest but also facing complex operational risks ranging from cybersecurity to volatile markets.
“The new capital standards will ensure that pension operators are adequately equipped to fund their operations, absorb risks, and deliver efficient services.”PenCom said in the new circular signed by the Director of Surveillance, S.M. Saleem.
The commission was clear on this stating that the move was not only about regulatory compliance but also about reinforcing the credibility of the CPS, which remains a critical pillar in Nigeria’s financial system and retirement security framework. “With these reforms, we expect operators to consolidate their achievements, withstand economic headwinds, and position Nigeria’s pension industry to play a more active role in national development,” PenCom stated.
The revised capital requirement, he said, would subsequently be monitored by the commission every two years based on the audited financial statements of the Pension Fund Operators and any shortfall shall be made up within 90 days.
