PenCom Issues New Rules on Diaspora Pension Remittances, Tightens Reporting on Dollar Inflows

The National Pension Commission (PenCom) has rolled out fresh compliance measures to regulate foreign currency pension contributions, mandating Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to report all inflows above $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours.

The directive, contained in the Guidelines on Foreign Currency Pension Contributions released in September 2025, is designed to strengthen transparency, curb illicit financial flows, and align Nigeria’s pension industry with global anti-money laundering standards.

According to the guidelines, PFAs and PFCs must immediately flag suspicious transactions, even if they fall below the $10,000 threshold. The move reflects the government’s broader effort to safeguard the country’s pension assets, currently valued at over ₦23 trillion, from being exploited for financial crimes.

Contributions into the Dollar Fund will be invested in secure, dollar-denominated instruments, including Eurobonds, supranational bonds, Federal Government-backed securities, and exchange-traded funds (ETFs). PFAs will have limited exposure to naira assets but are required to hedge currency risks through Central Bank-approved instruments such as swaps and futures.

Analysts say the reforms could deepen the Nigerian pension industry by introducing fresh foreign exchange liquidity at a time when the country faces mounting pressure on the naira. For the diaspora community, the framework offers a more secure channel to save in hard currency while planning for retirement back home.

The guidelines also signal PenCom’s intent to diversify the pension portfolio and integrate global best practices into Nigeria’s retirement savings structure, which has historically been dominated by naira contributions.