PenCom directive triggers push for pension clearance compliance nationwide
The National Pension Commission has ignited a wave of corporate adherence after instructing businesses to secure Pension Clearance Certificates from every vendor and service provider.This directive is a result of a six-month deadline imposed in May 2025 on Licensed Pension Fund Operators, mandating them to ensure PCC compliance throughout their entire operational landscape — which includes vendors, parent companies, subsidiaries, and institutional shareholders.
The initiative aims to reinforce the implementation of the Pension Reform Act (PRA) 2014, which mandates all public and private employers to participate in the Contributory Pension Scheme and submit pension contributions within seven working days following salary payments.
“The Parent Companies, Subsidiaries, Holding Companies, and Institutional Shareholders of Licensed Pension Fund Operators must hold valid Pension Clearance Certificates and ensure that every vendor and service provider they engage complies with PCC requirements as a condition for entering any Service Level or Technical Agreements,” stated the circular signed by A.M. Saleem, Head of PenCom’s Surveillance Department.
In response to this directive, businesses across various sectors have begun issuing formal notifications to vendors, making valid PCCs a requirement for renewing or forming service contracts.
Insiders report that vendors are already receiving letters requesting compliance within the specified deadline.
By May 15, PenCom had distributed 21,978 PCCs to employers across the country, encompassing sectors like finance, manufacturing, telecommunications, and professional services. This certificate verifies that a business is fulfilling its pension duties to employees and is needed for participating in government contract bidding, as outlined by Nairametrics.
“The instruction came after noting a considerable number of employers still do not comply with this legal requirement,” PenCom indicated, referring to Section 2 of the PRA 2014.
PenCom’s directive also affects vendor interactions, altering the investment protocols for Licensed Pension Fund Operators. According to the new regulations, LPFOs are permitted to invest only in firms and financial institutions that also mandate PCC compliance from their own vendors and service providers.
This cascading accountability model is designed to embed pension responsibilities throughout the entire corporate and financial framework.
To implement this, all counterparties are required to sign an annual compliance attestation affirming enforcement of the PCC requirement across their vendor networks, with the document included in LPFO investment records.
This initiative is part of PenCom’s broader effort to enhance pension governance and ensure that employers meet their responsibilities under the PRA 2014. By linking PCC compliance to both service contracts and investment qualifications, the Commission is leveraging regulatory power to instigate systemic change.
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