Retirement Increases Capital Base for PFAS to N20BN

The National Pension Commission (Pencom) has increased the minimum capital requirements for the Pension Fund Administrator (PFA) and the Pension Fund Guard (PFC) to strengthen the financial stability of the pension industry.

The Commission revealed this in a circular signed by the Director of the Supervision Department, Mr. Saleem Abdulrahman.

The circular was seen by journalists on Saturday.

Pencom said the review was carried out after the 2014 Pension Reform Law and in line with the best global practices.

Read the circular: “PFAS will now be asked to maintain a level of capital that is proportional to their managed assets (AUM), while PFC will harmonize their threshold with detained assets (AUC).

“For PFA, operators with AUM N500 billion and above will be asked to maintain a minimum N20 billion, plus one percent of the excess N500 billion.

“Also, PFAS with AUM under the N500 billion is to maintain the N20 billion capital base.”

The Commission added that PFA specific objectives such as NPF Pensions Limited will require N30 billion, while the Nigeria Limited University retirement management company will maintain the N20 billion.

Also read: Pencom Rues Inflation Effects, Naira Devaluation of Pension Funds

“The minimum capital for the new PFA licensing is pegged on the N20 billion immediately.

“Likewise, the capital requirements for PFC have been raised from N2 billion, set in 2004, to N25 billion plus 0.1 percent AUC.

“The new PFC license will also attract the minimum capital requirements of the N25 billion.

“Pencom explains that adjustments are needed to reflect the exponential growth of retirement assets, increasing operating complexity, and the need for strong technology, cyber security, and increasing service provision,” he added.

The commission gave operators until December 31, 2026, to comply with a new threshold.