The National Pension Commission (PenCom) has issued a directive requiring all service providers and vendors working with Licensed Pension Fund Operators (LPFOs) to present valid Pension Clearance Certificates (PCCs), in a move aimed at enhancing compliance with the Pension Reform Act 2014.
A circular, dated 22 May 2025, mandates that LPFOs must not enter into any service or technical agreements unless their counterparties are fully compliant with the provisions of the Contributory Pension Scheme (CPS). This requirement also extends to all vendors and service providers engaged by those counterparties.
The circular signed by the Commission’s Head of Surveillance, A. M. Saleem stems from widespread non-compliance by employers, despite ongoing enforcement measures, according to the circular signed by the Commission’s Head of Surveillance Department.
“Despite continuous engagements and enforcement actions by the National Pension Commission (the Commission), a significant number of employers remain in breach of this statutory obligation,” the circular read in parts.
“Pursuant to its regulatory mandate, the Commission has appointed Recovery Agents (RAs) to audit defaulting employers, impose administrative sanctions, and pursue judicial process of recovery of outstanding contributions and penalties. However, persistent non-compliance by some entities continues to undermine the objectives of the CPS.” It added.
To address persistent violations, PenCom has already engaged Recovery Agents (RAs) to audit defaulting employers, impose administrative sanctions, and recover outstanding contributions. However, the new directive represents a strategic shift towards proactive enforcement via industry-wide policy integration.
Under the new rules:
- LPFOs must demand a valid PCC from every vendor or service provider before engagement.
- Investment transactions, including commercial papers, bond issuances, and bank placements, must only involve companies that enforce PCC compliance within their own supply chains.
- All counterparties must sign a Compliance Attestation confirming the enforcement of the PCC requirement across their vendor ecosystems. This attestation must be updated annually.
- LPFOs are also required to revise internal policies, due diligence procedures, vendor selection criteria, and investment risk frameworks to align with the new directive.
PenCom has provided a six-month transition period from the date of the circular for all LPFOs and counterparties to fully implement the outlined measures.
The directive underscores the regulator’s commitment to safeguarding the integrity of Nigeria’s pension system and expanding coverage through institutional accountability.
Enquiries regarding the circular are to be directed to the Commission’s Surveillance Department.
