PenCom Directs PFAs to Report Pension Contributions Above $10,000 to NFIU Within 24 Hours
The National Pension Commission (PenCom) has issued a strict directive requiring all Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to report any foreign currency pension contributions exceeding $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours. The guideline, issued in September 2025, aims to strengthen oversight of the Contributory Pension Scheme (CPS) and align Nigeria’s pension sector with global compliance standards.
Under the new rules, PFAs and PFCs must provide detailed information for each transaction above the $10,000 threshold, including the contributor’s name, address, amount, and purpose. Contributions deemed suspicious, even if below the threshold, must also be reported to the NFIU, in accordance with the Financial Intelligence Unit Act 2018 and the Money Laundering (Prevention and Prohibition) Act 2022.
All foreign currency contributions must be made in US dollars, regardless of the contributor’s earning currency. Nigerians abroad are expected to use Non-Resident Nigerian Ordinary Accounts (NRNOAs), while contributors in Nigeria must remit funds through domiciliary accounts linked to the custodian’s collection banks. The guidelines also introduce a savings split: 60% of contributions can be accessed under limited conditions before retirement, while the remaining 40% is reserved strictly for retirement.
Foreign currency contributions will be pooled into a dedicated Dollar Fund managed by PFAs, invested primarily in dollar-denominated instruments such as Eurobonds, supranational bonds, FGN-backed securities, and exchange-traded funds. While PFAs may invest in naira assets, they must hedge currency risks using Central Bank of Nigeria-approved instruments. Contributions and returns held for at least five years are tax-free, with early withdrawals subject to applicable taxes.
PenCom emphasized that the directive is a critical measure to prevent the use of the pension system for money laundering or terrorism financing. For Nigerians living abroad, the guidelines offer a structured avenue to save in hard currency, while for regulators, they provide enhanced transparency over dollar inflows. Daily and monthly reporting to PenCom will ensure continuous monitoring of contributions, withdrawals, and portfolio valuations in both US dollars and naira equivalents.
source: nairametrics