PenCom Mandates PCC For PFO Owners And Vendors

The National Pension Commission (PenCom) has reaffirmed that all parent companies, subsidiaries, and institutional shareholders of licensed pension fund operators (PFOs) must possess a valid Pension Clearance Certificate (PCC).

This clarification came through a new circular issued by the Commission on Friday. In it, PenCom emphasized that investors in PFOs are not exempt from the existing directive, which prohibits PFOs from engaging vendors who lack a valid PCC.

As of May 15, the Commission had issued PCCs to 21,978 employers across various sectors in Nigeria. The PCC serves as proof that an organization is meeting its pension obligations to employees and is a prerequisite for bidding on government contracts.

The circular signed by the Head of the Surveillance Department, A.M. Saleem, PenCom, read, “The Parent Companies, Subsidiaries, Holding Companies and Institutional Shareholders of Licensed Pension Fund Operators shall possess valid Pension Clearance Certificates and ensure that every vendor and service provider engaged by them complies with the requirement of the PCC as a precondition for entering into any Service Level or Technical Agreement.”

The Commission has granted licensed pension fund operators a six-month deadline to ensure full compliance with the Pension Reform Act (PRA) 2014 across their networks — including vendors, parent companies, subsidiaries, and institutional shareholders.

PenCom explained that the directive was prompted by the continued non-compliance of many employers with Section 2 of the PRA 2014. This section mandates all employers — whether in the public or private sector, including federal, state, and local government entities — to participate in the Contributory Pension Scheme and remit pension contributions within seven working days of paying salaries.

To reinforce compliance, the Commission has stepped up awareness efforts and deployed Recovery Agents tasked with auditing defaulters, recovering unpaid contributions, and applying penalties. Additionally, PenCom has barred all Licensed Pension Fund Operators — including Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) — from engaging any service providers or vendors that fail to remit pension contributions for their employees, as confirmed by a valid Pension Clearance Certificate issued by the Commission.

The statement further read, “To further strengthen enforcement, improve compliance, and broaden pension coverage, the Commission has issued the following directives: 1. All LPFOs shall ensure that any vendor or service provider they engage with presents a valid Pension Clearance Certificate issued by the Commission as a condition for entering into or renewing Service Level or Technical Agreements. LPFOs must also ensure that investments are made only with companies and financial institutions that require PCCs from their own vendors and service providers.

“Every counterparty must execute a compliance attestation, confirming that it enforces the PCC requirement across its vendor network. This attestation must be updated annually and included in LPFO investment documentation. Counterparties must also submit valid PCCs from their own vendors/service providers before engaging in any investment transaction with LPFOs, including those involving commercial papers, bond issuances, and bank placements. LPFOs have been directed to integrate these requirements into their internal policies, vendor selection processes, due diligence procedures, governance, and investment risk assessment frameworks.

“The Parent Companies, Subsidiaries, Holding Companies and Institutional Shareholders of LPFOs shall possess a valid Pension Clearance Certificate and ensure that every vendor and service provider engaged by them complies with the requirements of the PCC as a precondition for entering into any Service Level or Technical Agreement. The requirement for compliance attestation is also applicable to the categories.”

The Federal Government has emphasized the importance of strategically using the nation’s pension assets to fast-track national development, recognizing the pension industry as a vital driver of long-term economic growth.

At the 2025 Pension Industry Leadership Retreat in early May, Finance Minister and Coordinating Minister of the Economy, Mr. Wale Edun, underscored the pension sector’s crucial role in advancing Nigeria’s economy.

He highlighted the necessity of directing investments towards national priorities like infrastructure, housing, energy, and digital inclusion, noting that pension assets now exceed ₦23 trillion, representing about 8.6% of the country’s GDP.

“We must harness the transformative power of pension funds to support sustainable growth without compromising the security of retirees’ savings, he said.