PFAs Must Report Pension Payments above $10,000 – PenCom
..PenCom, TUC Deepen Ties to Bolster Workers’ Pension Welfare
The National Pension Commission (PenCom) has issued fresh directives to strengthen oversight of the Contributory Pension Scheme (CPS), mandating Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to report foreign currency pension contributions above $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours.
Contained in the Guidelines on Foreign Currency Pension Contributions released in September 2025, the measure is designed to allow Nigerians in the diaspora and residents earning in foreign currency to participate in the CPS while tightening controls to prevent abuse.
PFAs and PFCs are required to comply with Section 3(1) of the Money Laundering (Prevention and Prohibition) Act 2022 by reporting all contributions above $10,000 with full details, while suspicious inflows below the threshold must also be flagged.
All contributions must be made in US dollars, with Nigerians abroad using Non-Resident Nigerian Ordinary Accounts and contributors at home remitting through domiciliary accounts linked to custodians’ collection banks.
Contributions will be split, with 60 per cent accessible under limited conditions before retirement and 40 per cent preserved strictly for retirement. Withdrawals are restricted to twice yearly and only six months after the initial deposit.
PenCom said contributions will be pooled into a dedicated Dollar Fund managed by PFAs, to be invested mainly in dollar-denominated securities such as Eurobonds, supranational bonds, and FGN-backed instruments.
PFAs may invest in naira assets but must hedge risks using CBN-approved tools like swaps and futures. Contributions and returns are tax-free if held for five years, though early withdrawals will attract taxes. PFAs must also submit daily and monthly reports to PenCom detailing contributions, withdrawals, and portfolio valuations in dollars and naira equivalents.
Meanwhile, PenCom has reinforced its collaboration with the Trade Union Congress of Nigeria (TUC) to enhance workers’ pension welfare. Director General, Ms Omolola Oloworaran, who led a team of senior officials on a courtesy visit to the TUC President, Comrade Festus Osifo, in Abuja, reaffirmed the commission’s commitment to reforms that safeguard pension assets and ensure wider compliance. She stressed that every employer is mandated under the Pension Reform Act 2014 to remit workers’ pension contributions promptly and urged the TUC to support enforcement against defaulters.
Oloworaran disclosed that PenCom is finalising a revised Investment Regulation to expand opportunities in alternative assets and improve returns, while working with the Central Bank of Nigeria and the Federal Ministry of Finance on mechanisms that would allow pension investments in naira to yield returns in dollars, thereby insulating savings from inflation and exchange rate risks.
She also announced plans to introduce a minimum pension under the CPS, following President Bola Tinubu’s approval of a N758 billion bond to fund the Pension Protection Fund.
In his response, Osifo commended PenCom for professionalism and effectiveness, pledging TUC’s continued support in driving compliance.
He criticised employers who deduct but fail to remit workers’ contributions, warning that such malpractice undermines retirement savings and often triggers industrial disputes.
He also called for a review of the Pension Reform Act 2014 to provide greater flexibility in investment options, particularly to shield pensions from inflation and currency volatility.
