GUIDELINES FOR THE OPERATIONS OF PENSION FUND CUSTODIANS
Guideline · Finance
Guidelines regulate how licensed Pension Fund Custodians hold and safeguard pension assets for administrators and contributors. They target custodians, Pension Fund Administrators, and supervisory officers. This maintains the integrity and transparency of pension funds.
GUIDELINES FOR THE OPERATIONS OF PENSION FUND CUSTODIANS
What Is This Policy?
Comprehensive operational guidelines governing how licensed Pension Fund Custodians hold, safeguard, and report on pension fund assets on behalf of Pension Fund Administrators and their contributors.
Who Does It Target?
Licensed Pension Fund Custodians PFAs who engage custodians to hold fund assets PenCom examination and supervision officers Auditors of pension fund custodians
What Does It Aim to Achieve?
Ensure the safekeeping and integrity of pension fund assets, prevent commingling with custodian own assets, and maintain transparent and accurate records for PFA and PenCom oversight.
Key Features
Segregated Custody: Pension fund assets must be held in segregated accounts, completely separate from custodian proprietary assets. Daily Reporting: Custodians must provide PFAs with daily statements of all assets held and all transactions processed. Asset Verification: Custodians must verify the existence and value of all assets in custody on a continuous basis. Settlement Services: Custodians process all investment transactions including purchases, sales, and income collection on behalf of PFAs.
Current Status
Rollout Stage: Active Coverage: All licensed pension fund custodians Beneficiaries: Pension contributors; PFAs; system integrity Funding: Custodian fee revenues
How to Access
PFAs must verify custodian statements against their own records daily PenCom examiners conduct periodic on-site custody examinations PFCs must submit to PenCom monthly custody reports Application method: Engage PenCom for custodian licensing and guidance.
Important Terms
Commingling of pension assets with custodian own assets is a serious offence PFCs are liable for losses arising from their custody failures Custodian agreements must include PenCom-prescribed minimum terms
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom)
Legal Framework
Issued under the regulatory powers of the National Pension Commission (PenCom) pursuant to the Pension Reform Act 2014. Custody rules draw on the Central Bank of Nigeria Act 2007, the Banks and Other Financial Institutions Act (BOFIA) 2020 (custodian licensing), the Securities and Exchange Commission Rules on custody of investment assets, and international custodian bank standards. Aligns with IOPS Principles for Private Pension Supervision.