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The National Pension Commission (PenCom) has directed all Pension Fund Administrators (PFAs) and Custodians (PFCs) to report any foreign currency pension contribution exceeding $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within a 24-hour window.
Under the rules, PFAs and PFCs must comply with Section 3(1) of the Money Laundering (Prevention and Prohibition) Act 2022 by providing full details of any qualifying transaction, including the contributor’s name, address, amount, and purpose. Suspicious transactions below the $10,000 threshold must also be flagged in line with the Financial Intelligence Unit Act 2018.
All contributions must be made in US dollars. Nigerians overseas are required to use Non-Resident Nigerian Ordinary Accounts (NRNOAs), while domestic contributors must deposit through domiciliary accounts linked to the custodians’ collection banks.
A savings split applies: 60 per cent of contributions can be accessed before retirement under limited conditions, while the remaining 40 per cent is preserved strictly for retirement and can only be withdrawn twice a year, starting six months after the initial deposit.
Foreign currency pensions will be pooled into a dedicated Dollar Fund managed by PFAs and invested mainly in dollar-denominated assets such as Eurobonds, supranational bonds, FGN-backed securities, and exchange-traded funds.
Where naira investments are allowed, PFAs must hedge currency risk using Central Bank of Nigeria-approved instruments.
PenCom confirmed that contributions and returns are tax-free if held for at least five years, although early withdrawals will attract tax, which must be remitted within 21 days.
PFAs are required to send daily and monthly reports to PenCom detailing contributions, withdrawals, and portfolio valuations in both dollars and naira.
Officials say the mandatory reporting of high-value inflows is aimed at preventing money laundering and terrorist financing, bringing Nigeria’s pension sector in line with international compliance standards while offering Nigerians abroad a secure way to save for retirement in hard currency.
