The National Pension Commission (PenCom) has raised the minimum capital requirement for pension fund administrators (PFAs) and pension fund custodians (PFCs).
A.M. Saleem, the commission’s director of surveillance department, announced the revised rules in a circular on Friday.
PenCom said the minimum capital requirement for a new PFA licence is now N20 billion, effective immediately.
The new model aligned the capital requirement with the pension assets under management (AUM) and assets under custody (AUC) of the PFAs and PFCs, respectively.
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According to the commission, for PFAs, operators with AUM of N500 billion and above will be required to maintain a capital base of N20 billion plus 1 percent of AUM.
Also, PFAs with AUM below N500 billion are to maintain a capital base of N20 billion.
Similarly, PenCom announced that the capital requirement for licensed PFCs has been reviewed upward to N25 billion plus 0.1 percent of AUC.
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“The minimum capital requirement for PFC business had not been reviewed since it was established at ₦2 billion in 2004,” PenCom said.
“The operating landscape of 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.
“These developments underscore the need to reassess the adequacy of the existing capital threshold to ensure continued financial stability and effective risk management in the operations of the PFC business.”
The commission said the timeline for compliance with the revised capital requirements for both licensed PFAs and PFCs shall be December 31, 2026.
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PenCom added that the revised capital requirement would subsequently be monitored by the commission every two years based on the audited financial statements of the pension fund operator, and any shortfall shall be made up within 90 days.
