National Pension Commission (PenCom) has introduced sweeping compliance rules for foreign currency contributions, directing Pension Fund Administrators (PFAs) and custodians (PFCs) to report all inflows above $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours.
Under the Guidelines on Foreign Currency Pension Contributions released this month, the PFAs and PFCs must report any contribution to NFIU within 24 hours.
Suspicious transactions, even below the threshold, are also to be flagged immediately in line with Nigeria’s anti-money laundering laws.
The guideline marks a new chapter for the pension industry, which has grown into a N23 trillion asset class, but still relies heavily on naira-denominated savings.
With the reforms, the diaspora Nigerian group remitting over $20 billion yearly into the country can channel part of their earnings into retirement savings in hard currency, giving PFAs access to fresh dollar liquidity.
The commission has created a dedicated Dollar Fund into which the contributions will flow, to be invested mainly in secure instruments such as Eurobonds, supranational bonds, FGN-backed securities, and exchange-traded funds.
While PFAs are allowed limited exposure to naira assets, they must hedge currency risks using Central Bank-approved tools like swaps and futures.
