By Oluwatosin Ogunjuyigbe
Copyright businessday
The National Pension Commission (PenCom) has increased the minimum capital requirements for pension fund administrators (PFAs) and pension fund custodians (PFCs), marking the first major review in over two decades.
In a circular issued on Friday, A.M. Saleem, director of PenCom’s surveillance department, said the new framework ties capital requirements to pension assets under management (AUM) and assets under custody (AUC).
Under the revised rules, the minimum capital base for a new PFA licence is now ₦20 billion, effective immediately. PFAs managing ₦500 billion and above must maintain ₦20 billion plus 1% of their AUM, while those with less than ₦500 billion will maintain a flat ₦20 billion.
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For custodians, the minimum capital threshold has been raised to ₦25 billion plus 0.1% of AUC.
PenCom noted that the PFC capital requirement had remained at ₦2 billion since its introduction in 2004, despite exponential growth in pension assets and operational complexities.
“The operating landscape of the PFC business has evolved significantly over 21 years, marked by exponential growth in AUC and increased complexity of operational activities requiring deployment of robust technology, cybersecurity and staff welfare,” the commission said.
Licensed operators have until December 31, 2026, to comply with the new capital thresholds. PenCom added that it will monitor compliance every two years, based on audited financial statements, and any shortfall must be rectified within 90 days.
