The National Pension Commission (PenCom) has announced a landmark increase in the minimum capital requirement for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs), raising the threshold for PFAs tenfold from ₦2 billion to ₦20 billion.
In a circular titled “Revised Minimum Capital Requirements for Licensed Pension Fund Administrators and Pension Fund Custodians,” the regulator said the move was designed to strengthen financial stability, align with global best practices, and sustain the growth of Nigeria’s 21-year-old Contributory Pension Scheme (CPS).
According to the directive, PFAs with Assets Under Management (AUM) of ₦500 billion and above must maintain a capital base of ₦20 billion plus 1% of the excess AUM. Special Purpose PFAs like NPF Pensions Limited will now be required to hold ₦30 billion, while the Nigerian University Pension Management Company Limited must keep ₦20 billion.
For Pension Fund Custodians (PFCs), the capital requirement has been increased from ₦2 billion to ₦25 billion plus 0.1% of Assets Under Custody (AUC).
“The operating landscape of pension business has evolved significantly over 21 years. These developments underscore the need to reassess the adequacy of the existing capital threshold to ensure financial stability and effective risk management,” the circular stated.
The new capital base takes immediate effect for new licensees, while existing operators have until December 31, 2026, to comply. PenCom added that compliance will be monitored every two years based on audited financial statements, with any shortfall expected to be rectified within 90 days.
The regulator explained that the revision was anchored on Sections 60(1)(b), 62(b), and 115(1) of the Pension Reform Act (PRA) 2014, stressing that well-capitalized operators are critical for service delivery, technology upgrades, cybersecurity, and investor protection.
The announcement comes barely a day after PenCom approved a new investment window that allows pension funds to invest in tradable Gold Receipts on SEC-recognized exchanges, a reform aimed at boosting returns and diversifying portfolios.
With pension assets already valued at ₦25.9 trillion as of August 2025, analysts say the latest recapitalization push signals a new era of consolidation in the industry, where smaller PFAs may be forced into mergers or acquisitions to survive.
