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The National Pension Commission, PenCom, has announced that employers and operators in Nigeria’s pension and insurance sectors who fail to comply with relevant laws will no longer be allowed to operate.
The directive, given in Abuja, aims to strengthen adherence to the Pension Reform Act, PRA 2014 and the Nigerian Insurance Industry Reform Act, NIIRA 2025.
In a joint circular signed by the Director of Surveillance at PenCom, Abdulrahaman Muhammad Saleem, and the Director of Legal, Enforcement and Market Development at NAICOM, Dr Talmiz Usman, both regulators mandated strict compliance with the Contributory Pension Scheme, CPS and the requirement for all employers to maintain Group Life Assurance, GLA coverage for their employees.
PenCom reminded employers that, under Section 2 of the PRA 2014, every organisation in the public and private sectors must participate in the CPS, remit pension deductions within seven working days after salary payment, and provide life insurance cover for staff.
Despite ongoing enforcement actions, the Commission lamented that several employers; including those within the financial services sector; remain in breach of these statutory obligations. It disclosed that Recovery Agents have been appointed to audit defaulters, impose sanctions, and recover outstanding contributions and penalties.
Under the new directive, all licensed insurance companies must now present valid Pension Clearance Certificates, PCCs, from PenCom and Group Life Assurance Certificates compliant with NIIRA 2025 before undertaking any operational or investment activities. Vendors, service providers, and counterparties must also hold valid PCCs and GLA Certificates before entering into contracts.
The measure extends to investment dealings, including commercial papers, bond issuances, and bank placements, with all parties required to execute Compliance Attestations confirming that their own partners also meet pension and insurance obligations.
This cascading compliance requirement, according to the regulators, will embed legal adherence across the entire insurance and pension value chain.
Insurance companies have been directed to integrate these new rules into their governance structures, vendor selection processes, and risk assessment frameworks. Parent companies, subsidiaries, and shareholders must equally demonstrate compliance before business approvals are granted.
PenCom and NAICOM have provided a six-month transition period for full implementation, during which companies are expected to align internal policies and communicate new compliance standards to all stakeholders.
PR/Umbwanko Baba
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