By Atoyebi Nike
A new directive from the National Pension Commission (PenCom) has set off a compliance drive across Nigeria, with companies now requiring Pension Clearance Certificates (PCCs) from vendors and service providers.
The policy, issued in May 2025 with a six-month compliance window, mandates Licensed Pension Fund Operators (LPFOs) to ensure that their vendors, parent companies, subsidiaries, and institutional shareholders all hold valid PCCs before entering service or technical agreements. The requirement enforces provisions of the Pension Reform Act (PRA) 2014, which compels employers to remit pension contributions within seven working days of salary payment.
PenCom’s circular, signed by Surveillance Department head A.M. Saleem, has already prompted firms in multiple sectors to notify partners of the new rule. As of May 15, 21,978 PCCs had been issued to employers in industries ranging from finance and manufacturing to telecoms and professional services.
The PCC, which confirms an employer’s compliance with pension obligations, is also mandatory for bidding on government contracts. Under the directive, LPFOs may only invest in companies that themselves demand PCCs from their vendors, creating a cascading compliance model aimed at embedding pension accountability throughout the corporate and financial system.
PenCom also requires annual compliance attestations from counterparties to be included in LPFO investment documentation. The Commission says the move is part of a broader push to boost pension governance and reduce default risks, with LPFOs positioned as key enforcers across their business networks.
Industry analysts expect the policy to improve pension contribution rates, especially among private-sector employers, while strengthening systemic safeguards for workers’ retirement savings.
