The National Pension Commission (PenCom) has issued a new guidelines for Foreign Currency (FCY) Pension Contributions, paving the way for Nigerians living and working abroad and Nigerian/Foreign workers working in Nigeria, but earning all or part of their remuneration in foreign currency to be part of the scheme.
The guidelines, which is part of the Commission’s PensionRevolution2.0 was announced by Omolola Oloworaran, director general PenCom in her X handle.
She said PenCom is embarking on a wave of rolling out new regulations/initiatives daily, setting higher standards across critical pillars of the Pension endeavour.
She said, “The FCY Pension Contributions Guidelines provides a pension arrangement under the CPS, for Nigerians living & working abroad and Nigerian/Foreign workers working in Nigeria but earning all or part of their remuneration in foreign currency.
According to her, the pension contributions by Diaspora Nigerians and other eligible persons are to be made in Dollar. In the same vein, contributors will also access their benefits in Dollar except they elect to do otherwise.
“The FCY Pension Contributions Guidelines, which are now being issued for the first time, mark a watershed moment for the CPS coverage expansion and financial inclusion drive. It is a bold reform which shows that PenCom cares about the retirement security of all working Nigerians, the DG said.
This Guideline establishes the regulatory framework for Licensed Pension Fund Operators (LPFOs) to accept, manage, and invest foreign currency (FCY) contributions under the Contributory Pension Scheme (CPS).
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Issued pursuant to the powers of the National Pension Commission (PenCom) under the Pension Reform Act 2014, it is designed to deepen CPS participation, particularly by
Nigerians in the diaspora and other eligible contributors, while safeguarding the integrity and transparency of the pension system.
The provisions address scope, eligibility, operational requirements, and governance standards for FCY contributions. They align with global best practices on foreign currency pension administration, ensuring robust risk management, clear accountability, and effective oversight.
The objectives of this guideline are to expand access to the CPS for Nigerians earning in foreign currency, including those living abroad, provide a secure and transparent mechanism for making and managing FCY contributions, strengthen the investment potential of pension funds through diversified currency inflows, and ensure compliance with local regulatory requirements and international standards.
On mode of contributions, the guidelines said contributors must open an RSA with a chosen PFA and can make daily, weekly, or monthly pension contributions at a frequency that aligns with their earning structure.
Contributions shall be in foreign currency (USD); The Contributions Section of the RSA statement shall be divided into two, 60 percent shall be the contingent, available for withdrawal; while 40 percent shall only be withdrawn at retirement for pension; Contributions will be kept in the RSAfor a minimum of six months before withdrawal; RSA Contributors living in diaspora shall open a Non-Resident Nigerian Ordinary Account (NRNOA), in line with CBN requirements and shall remit pension contributions from their NRNOA to the foreign currency collection account of the PFA with the PFC.
Others include that RSA Contributors resident in Nigeria shall open Domiciliary Accounts (DA) with the Collecting Bank of the Pension Fund Custodian (PFC) appointed by the PFA and shall remit pension contributions from their DA to the foreign currency collection account of the PFA with the PFC.
Contributors shall remit pension contributions from their DA to the foreign currency collection account of the PFA with the PFC; Contributors shall indicate their Personal Identification Number (PIN) in all transfer instructions regarding the remittance of contributions.
The collecting Bank of the PFC shall not charge any fee on foreign currency contributions.
Notwithstanding the provisions of 5.1(b) above, contributors who receive salaries in currencies other than the USD are eligible to contribute, however, they will be required to remit their contributions in USD, the guidelines said.
