By 
The National Pension Commission (PenCom) has taken a momentous step in advancing pension services across Nigeria. In a recent circular directed at licensed Pension Fund Administrators (PFAs), PenCom has introduced measures to establish and operate branch offices and service centers. This move is a direct response to the growing demand for pension services nationwide.
Beyond these measures, PenCom’s objectives include significantly enhancing the geographical coverage of PFAs and elevating service delivery to Retirement Savings Account (RSA) holders. The Contributory Pension Scheme (CPS) has seen remarkable growth since its inception, with over 10 million RSA holders and pension assets soaring to N17.29 trillion as of August 2023. The expansion of the CPS in Nigeria has prompted PenCom to recognize the urgent need for a broader presence of PFAs nationwide.
Section 72 of the Pension Reform Act of 2014 (PRA 2014) empowers PFAs, with PenCom’s approval, to establish branch offices within or outside Nigeria. This provision enables a strategic and regulated expansion of PFAs’ presence, aligning with the growing demand for pension services across the nation.
The circular issued in August 2023 consolidates the conditions for opening branch offices and service centers in a single document. It also establishes new standards that PFAs must meet regarding their branches. PenCom emphasizes the need for physical presence to meet the demands of pension consumers. Every PFA must open a Branch Office in any state with up to 10,000 funded RSAs. Additionally, for every additional 10,000 funded RSAs, PFAs must establish a service center in a different location within the state. PenCom also mandates PFAs to open a service center in a state with up to 2,000 funded RSAs.
In 2021, PenCom raised the Minimum Regulatory Capital (Shareholders’ Fund) requirement for PFAs from N1 billion to N5 billion to bolster their financial capacity. By April 2022, all PFAs had successfully met the new Shareholders’ Fund requirement. This recapitalization has empowered PFAs to improve their capabilities in managing the growing number of RSA holders and pension assets and expand their branch operations.
The expansion of branches promises to encourage greater participation among those covered under the CPS. Furthermore, it will facilitate and catalyze voluntary enrollment in the Micro Pension Plan (MPP) for informal sector workers and the self-employed.
Emphasizing the role of PFAs, PenCom highlights their responsibility to create awareness and understanding of CPS operations among employers, employees, and Micro Pension Contributors (MPCs). This initiative underscores the objective of enhancing financial inclusivity and extending pension opportunities across various workforce sectors.
PFA branch offices and service centers offer essential services, including contributor registration and enrollment, record updates, pension contribution scheduling, benefits processing, inquiries, and comprehensive support services to RSA holders.
The circular outlines staffing requirements for PFA branches and service centers, emphasizing the need for qualified and experienced personnel. It also highlights the importance of appropriate infrastructure, including office spaces, robust ICT facilities, power backup solutions, and safety measures. The directive prohibits co-locations to maintain operational clarity and visibility.
PenCom has allowed a 12-month transition period for PFAs to adapt to the new requirements, ensuring a phased and systematic implementation.
In conclusion, this drive for broader geographic coverage and enhanced service quality represents a significant leap toward ensuring comprehensive access to pension services while elevating service quality for RSA holders nationwide. PenCom remains committed to the effective regulation and supervision of the Nigerian Pension Industry to ensure that retirement benefits are paid as and when due.
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