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The National Pension Commission (PenCom) has issued new guidelines allowing Pension Fund Administrators (PFAs) to invest part of Nigeria’s ₦24.6 trillion pension assets in foreign currency-denominated instruments, marking a major shift in the country’s pension investment framework.
The policy, unveiled in the Guidelines on Foreign Currency Pension Contributions, extends an opportunity previously limited to Closed Pension Fund Administrators (CPFAs) and establishes a regulatory framework for Licensed Pension Fund Operators (LPFOs) to accept, manage, and deploy foreign currency contributions under the Contributory Pension Scheme (CPS).
Under the new rules, all PFAs and Pension Fund Custodians (PFCs) must report foreign currency pension contributions above $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours, ensuring compliance with anti-money laundering regulations.
PenCom said the guidelines aim to:
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Expand CPS access to Nigerians earning in foreign currency, including those in the diaspora.
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Provide a transparent and secure mechanism for managing FX contributions.
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Strengthen the investment potential of pension funds through diversified currency inflows.
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Align local practices with international regulatory standards.
The framework sets out clear modalities for contributors:
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Diaspora contributors must open a Non-Resident Nigerian Ordinary Account (NRNOA) and channel contributions through their PFAs’ designated PFC account.
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Resident contributors are required to use domiciliary accounts with the collecting bank of their chosen PFC for remittances.
PFAs are mandated to invest FX contributions strictly within Nigeria, in line with allowable asset classes defined by PenCom’s Regulation on Investment of Pension Fund Assets, with all investments executed and retained in US dollars.
PenCom noted that the reform is designed to boost pension fund diversification, increase transparency, and ensure that Nigerians abroad can securely participate in the pension scheme.
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