By Atoyebi Nike
The National Pension Commission (PenCom) has banned significant cross-shareholding in Nigeria’s licensed Pension Fund Operators (LPFOs) as part of sweeping reforms aimed at safeguarding pension assets and ensuring good governance.
In guidelines issued on Friday, effective immediately, PenCom defined significant cross-shareholding as any direct or indirect ownership of five per cent or more in multiple LPFOs, whether acquired through mergers, acquisitions, inheritance, debt-to-equity conversion, or other means.
The regulator directed existing holders to divest within six months and warned that any shares held in violation of the guidelines would be void, stripped of voting rights, dividends, or governance privileges. Defaulting firms will also face administrative penalties under PenCom’s sanctions framework.
PenCom also released new rules allowing LPFOs to enter centralised or shared service arrangements with parent or group entities, covering HR, ICT, legal, and procurement functions. Such arrangements must be competitively priced, transparent, and not compromise the independence of pension operators.
Meanwhile, the regulator inaugurated the Pension Industry Leadership Council to strengthen reforms, similar to the Bankers’ Committee in the financial sector. PenCom also disclosed that the Federal Government’s N758bn pension bond issuance, approved earlier in the year to clear outstanding liabilities, is on track to commence payments by October.
According to Usman Musa, Director of Contributions and Bond Redemption at PenCom, the bond will address pension arrears for university professors, fund the Pension Protection Fund for low-income earners, and clear all pension increases since 2007.
