By Kehinde Ibrahim, Lagos
THE National Pension Commission, PenCom, has reaffirmed that Nigeria’s pension assets remain adequately protected despite recent regulatory changes permitting Pension Fund Administrators, PFAs, to invest in the parent companies of their custodians, maintaining that the decision was driven by extensive risk analysis and robust governance safeguards.
The Commission also sought to dispel concerns over the status of the Nigeria Police Force under the Contributory Pension Scheme, CPS, clarifying that the police have not withdrawn from the scheme. Instead, PenCom said that ongoing engagements are focused on improving retirement benefits for police personnel while preserving the integrity of the existing pension framework.
Speaking during the Meet the Press briefing at the Presidential Villa in Abuja on Tuesday, PenCom Director-General, Omolola Oloworaran, explained that the Commission’s recent amendment to its investment guidelines followed a detailed assessment of potential risks and concluded that allowing such investments would not compromise contributors’ funds.
She stated that the revised regulation is intended to broaden investment opportunities for pension funds while maintaining strict prudential standards that govern the management of retirement savings.
According to Oloworaran, pension assets can only be invested in carefully screened financial instruments that satisfy rigorous requirements, including sustained profitability, strong corporate governance, favourable credit ratings and consistent financial performance.
She stressed that PFAs do not have unrestricted authority to invest contributors’ funds, noting that every investment decision must comply with PenCom’s comprehensive investment regulations.
“PFAs cannot simply enter the stock market and purchase any stock. There are clear investment guidelines. Companies must demonstrate profitability, maintain a strong track record and satisfy stringent eligibility requirements before pension funds can be invested in them,” she said.
The PenCom chief explained that the Commission continuously reviews its investment framework in line with market developments and global best practices while conducting routine examinations, compliance inspections and risk assessments of PFAs to ensure adherence to regulatory standards.
She added that every PFA operates under multiple layers of corporate governance, including oversight by its board of directors, investment committee and risk management committee, all of which provide additional safeguards against imprudent investment decisions.
Addressing concerns over the recent circular permitting PFAs to invest in the parent companies of their custodians, Oloworaran said the decision was based on evidence showing that the perceived conflict of interest was insignificant and adequately mitigated by existing regulatory controls.
She explained that the affected parent companies are predominantly Tier-1 financial institutions with strong capital positions, sound corporate governance and high credit ratings.
According to her, institutions such as First Bank, United Bank for Africa ,UBA, and Zenith Bank possess solid financial fundamentals that make them suitable investment destinations under PenCom’s strict investment guidelines.
She cited Stanbic IBTC as an example, explaining that under the previous rule, if Zenith Bank served as the pension custodian, Stanbic IBTC’s pension fund administrator was prohibited from investing in Zenith Bank shares despite the bank meeting all investment requirements.
Oloworaran said removing that restriction provides PFAs with greater flexibility to diversify investment portfolios without exposing contributors’ savings to undue risk.
On reports suggesting that the Nigeria Police Force was preparing to exit the Contributory Pension Scheme, the PenCom Director-General said such claims were inaccurate.
She clarified that the police remain active participants in the CPS but have continued to advocate for improved retirement benefits, particularly in comparison with personnel in the military who operate under a different pension arrangement.
Oloworaran said that PenCom recognises the concerns raised by the police and has been working closely with relevant government institutions to explore sustainable options for enhancing retirement benefits for serving and retired officers.
She emphasised that the Commission’s primary objective is to improve pension outcomes for contributors regardless of institutional affiliation.
“We support every initiative that improves the welfare of ordinary Nigerians. The discussions are centred on ensuring that police officers receive better retirement benefits, and we are actively working with the relevant authorities to achieve that objective,” she said.
The PenCom boss also dismissed reports alleging widespread delays in the payment of retirement benefits, insisting that retirees whose documentation has been properly completed receive their pension benefits within the stipulated timelines.
She said the Commission maintains a proactive complaint resolution mechanism and closely monitors reports of payment challenges, including those raised through social media platforms.
According to her, every reported case is investigated promptly to ensure that legitimate complaints are resolved without unnecessary delays.
To further improve service delivery, Oloworaran disclosed that PenCom is deploying a Customer Relationship Management, CRM, platform that will strengthen communication with contributors, retirees and other stakeholders while enabling faster resolution of pension-related complaints nationwide.
She added that the Commission is equally intensifying efforts to expand pension participation among workers in Nigeria’s informal sector through digital enrolment platforms and the licensing of Accredited Pension Agents.
According to her, these initiatives are expected to significantly deepen pension inclusion, improve retirement savings culture and broaden the coverage of the Contributory Pension Scheme over the next two years.
Oloworaran expressed confidence that the reforms being implemented by the Commission would strengthen public confidence in Nigeria’s pension industry while ensuring that contributors’ funds remain secure, professionally managed and capable of delivering sustainable returns over the long term.
