NATIONAL PENSION COMMISSION REGULATION ON INVESTMENT OF PENSION FUND ASSETS
Regulation · Finance
Regulations specify permissible asset classes and investment standards for pension fund assets in Nigeria. They target Pension Fund Administrators and Custodians to ensure proper management and diversification. This protects contributors by promoting sustainable returns and risk management.
NATIONAL PENSION COMMISSION REGULATION ON INVESTMENT OF PENSION FUND ASSETS
What Is This Policy?
PenCom regulations specifying the permissible asset classes, concentration limits, and investment standards for the investment of Retirement Savings Account funds and other pension assets in Nigeria.
Who Does It Target?
Pension Fund Administrators (PFAs) managing RSA funds Pension Fund Custodians safeguarding assets PenCom as the regulatory authority Employers and employees contributing to pension funds
What Does It Aim to Achieve?
Ensure pension fund assets are invested prudently, diversified across asset classes, and managed to generate sustainable returns for retirees while protecting contributors from undue risk.
Key Features
Permitted Asset Classes: Defines permissible investments including FGN securities, corporate bonds, equities, money market instruments, and real estate. Concentration Limits: Sets maximum percentage limits for any single issuer, asset class, or sector to ensure diversification. Multi-Fund Structure: Establishes Fund I, II, III, and IV with different risk profiles to match member age and risk tolerance. Prohibited Investments: Specifies categories of investments prohibited for pension funds including speculative derivatives and unrated securities.
Current Status
Rollout Stage: Active Coverage: All pension funds under the Contributory Pension Scheme Beneficiaries: Pension contributors and retirees Funding: Not applicable - governs pension fund investment
How to Access
PFAs must comply with investment guidelines for all RSA fund classes Investment portfolios must be reported to PenCom monthly Contributors may select their preferred fund (I-IV) based on risk appetite Application method: PFAs implement through their internal investment management processes under PenCom oversight.
Important Terms
Breach of investment guidelines attracts fines and possible licence suspension PFAs are fiduciaries; they must act in the best interest of contributors All investments must be valued at market rates for reporting purposes
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom)
Legal Framework
Issued under the Pension Reform Act 2014, which established the National Pension Commission (PenCom) and the Contributory Pension Scheme. Derives authority from PenCom's regulatory mandate under the Pension Reform Act and operates alongside the Investment Regulations for Pension Fund Administrators and the Guidelines for Pension Fund Operators.