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The National Pension Commission (PenCom) has issued new guidelines prohibiting significant cross-shareholding in more than one licensed Pension Fund Operator (PFO), effective immediately. The directive is part of broader reforms to strengthen governance, transparency, and the protection of pension assets.
Under the new rules, significant cross-shareholding refers to situations where an investor with a stake of five per cent or more in one PFO acquires or becomes entitled to a similar stake in another. This may occur through direct purchases, mergers and acquisitions inside or outside the pension industry, debt-to-equity conversions, inheritance, or other legal arrangements.
PenCom stated that no individual or entity may hold, or continue to hold, such stakes across multiple PFOs. For clarity, the Commission will aggregate shareholdings held by related parties—including affiliates, subsidiaries, holding companies, directors, employees, and family members—when determining compliance.
Existing cases of cross-shareholding must be resolved within six months, either from the effective date of the guideline or from when the stake is acquired by operation of law. Any non-compliant arrangements will be void, with affected shares stripped of rights such as voting, dividends, or participation in governance. Defaulters will also face penalties under PenCom’s sanctions framework.
Alongside this restriction, PenCom also released a circular on Centralised or Shared Services Arrangements (CSSAs), permitting PFOs to share functions such as HR, ICT, marketing, legal, and facilities management with parent or related entities. However, such arrangements must be conducted at arm’s length, competitively priced, and structured to preserve the operational independence of each PFO and the fiduciary duty owed to Retirement Savings Account (RSA) holders.
In a related development, PenCom inaugurated the Pension Industry Leadership Council in Abuja to provide collective leadership for the sector, similar to the Bankers’ Committee in the financial system. Director-General Omolola Oloworaran said the initiative would deepen reforms and foster collaboration among stakeholders.
On pension liabilities, the Commission confirmed that the N758 billion Federal Government bond to clear outstanding arrears is already in motion. According to Usman Musa, Director of Contributions and Bond Redemption at PenCom, issuance is expected to be completed by the end of September or early October, paving the way for payments.
The bond will settle long-standing shortfalls in university professors’ pensions, fund the Pension Protection Fund for low-income earners, and cover pension increases dating back to 2007. This marks a significant relief for pensioners who have waited years for resolution.
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