In order to ensure the safety of pension funds and to avoid mixing pension business and other businesses, it is desirable that the operators deal with pension funds only. This will enhance effective regulation and supervision.

The PFA will charge fees for the services being rendered on the RSA subject to such guidelines as may be issued by the National Pension Commission from time to time.

An employee or contributor has the freedom to move his account, once a year, from one PFA to another without giving any reason(s).

An applicant PFA must have a minimum paid up share capital of N150,000,000 (one hundred and fifty million naira) while an applicant PFC must have a minimum paid up capital of N2,000,000,000 (two billion naira) and shall be a licensed financial institution with a minimum net worth of N5,000,000,000 (five billion naira) unimpaired by losses and has total assets of N125,000,000,000 (one hundred and twenty-five billion naira) or is wholly owned by a licensed financial institution with similar financial resources.

The PFA manages and invests the pension funds while the PFC keeps the pension funds assets in safe custody and carries out transactions on behalf of the PFA.

A Pension Fund Custodian (PFC) is a company licensed by the National Pension Commission to keep pension money and assets in the RSA on trust for the employee on behalf of the PFA.

In accordance with the provisions of the Pension Reform Act 2004, only an employer with a pension scheme existing before the commencement of the Act can apply to be licensed as a Closed PFA.

A subsidiary of any company may apply for a licence to operate as a Closed PFA provided it satisfies the requirements of the Pension Reform Act 2004.

Every employee may decide to join the contributory pension scheme or move his/her RSA from a Closed PFA to a PFA of his choice subject to such rules and regulations as may be issued by the National Pension Commission.

Any employer with existing scheme of less than N500,000,000 (five hundred million naira) can still maintain the scheme but the scheme will have to be administered by a PFA separate from the organisation.

Any employer having existing pension fund assets worth N500,000,000 (five hundred million naira) or more who also meets the requirements of the Pension Reform Act 2004 may apply to the National Pension Commission for a Closed PFA licence to enable it manage pension funds of its employees directly or through its subsidiary.

Any employer managing its existing pension scheme before the enactment of the Pension reform Act 2004 may apply to the National Pension Commission to be licensed as a Closed Pension Fund Administrator to continue to manage such pension scheme. A Closed PFA cannot open or manage RSA for employees other than its employees or employees of its parent company if it is a subsidiary.

The Pension Fund Administrator cannot collect or spend the pension money in the RSA

The National Pension Commission will publish a list of all licensed PFAs and make it available to the public.

A Pension Fund Administrator (PFA) is a company licensed by the National Pension Commission to manage and invest the pension funds in the employee’s Retirement Savings Account (RSA).

The National Pension Commission issue licences to PFAs and Custodians, regulates their activities and generally formulates, directs and oversees the overall policy guidelines on pension matters in Nigeria.

The National Pension Commission is empowered by the Pension Reform Act 2004 to supervise and regulate new pension scheme.

The total contributions will be paid out by the employer directly to a Pension Fund Custodian (PFC) and will be managed and invested by the Pension Fund Administrator (PFA) of the employee’s choice.