The National Pension Commission (PenCom) has issued a directive to Licensed Pension Fund Operators (LPFOs) to ensure compliance with the Pension Reform Act 2014. LPFOs are now required to engage only vendors and service providers who have obtained a valid Pension Clearance Certificate (PCC) from PenCom, confirming their compliance with pension remittance obligations.
“All LPFOs shall ensure that any vendor or service provider they engage presents a valid Pension Clearance Certificate (PCC) issued by the Commission as a condition for entering into or renewing Service Level or Technical Agreements,” the directive reads.
This move aims to ensure that all employers, including those in the public and private sectors, comply with the law and remit pension contributions for their employees.
Counterparties must also execute a Compliance Attestation, confirming enforcement of the PCC requirement across their vendor network. “Every Counterparty must execute a Compliance Attestation, confirming that it enforces the PCC requirement across its vendor network,” the Commission emphasized.
LPFOs are also expected to integrate these requirements into their internal policies, vendor selection processes, due diligence procedures, governance, and investment risk assessment frameworks.
The Parent Companies, Subsidiaries, Holding Companies, and Institutional Shareholders of LPFOs are also expected to possess a valid PCC and ensure that every vendor and service provider engaged by them complies with the requirement of the PCC. A six-month transition window has been granted to allow for full implementation of the directive.
This move is expected to increase compliance among employers, particularly those in the private sector, and enhance the overall effectiveness of the Contributory Pension Scheme.
By ensuring that all stakeholders comply with the pension regulations, PenCom aims to broaden pension coverage and strengthen the retirement savings system in Nigeria.
