The National Pension Commission has insisted that the parent companies, subsidiaries and institutional shareholders in a licensed pension fund operator must hold a valid pension clearance certificate.

This was disclosed in a fresh circular from the Commission on Friday, where it clarified that the investors of a PFO were not exempted from its earlier circular barring PFOs from engaging vendors without valid PCCs.

As of May 15, PenCom had issued PCCs to 21,978 employers of labour in Nigeria, cutting across different sectors of the economy. The PCC certifies that an organisation is fulfilling its pension clearance certificate obligations to its employees, and it enables them to apply for 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 went on to give a six-month window to licensed pension fund operators to enforce compliance with the Pension Reform Act 2014 across their vendor networks, parent companies, subsidiaries, and institutional shareholders.

PenCom said the directive arose from observing that a significant number of employers remain non-compliant with this legal obligation according to Section 2 of the PRA 2014, which mandates all employers in the public and private sectors, including federal, state, and local governments, to participate in the Contributory Pension Scheme and remit pension contributions no later than seven working days after salary payments.

The regulator, aside from increasing the pace of sensitisation and appointing Recovery Agents to audit defaulters, recover outstanding contributions, and enforce sanctions, barred Licensed Pension Fund Operators comprising Pension Fund Administrators and Pension Fund Custodians from transacting with service providers and vendors that do not remit pensions for their employees as evidenced by a Pension Clearance Certificate issued by PenCom.

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.”

Meanwhile, the Federal Government has called for the strategic deployment of the nation’s pension assets to accelerate national development, describing the industry as a key engine for long-term growth.

Speaking at the 2025 Pension Industry Leadership Retreat held earlier in May, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, highlighted the critical role of the pension industry in driving Nigeria’s economic growth and development.

The minister stressed the need to align investments with national priorities such as infrastructure, housing, energy, and digital inclusion, with the pension assets now exceeding ₦23 tn—roughly 8.6 per cent of GDP.

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