PenCom to Enforce Pension Compliance Through Vendor and Investment Restrictions

In a major step to boost compliance and expand the coverage of the Contributory Pension Scheme (CPS), the National Pension Commission (PenCom) has directed all Licensed Pension Fund Operators (LPFOs)-including Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to stop engaging with vendors or service providers that fail to remit pension contributions for their employees.

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Under the new directive, LPFOs must only enter into or renew service-level or technical agreements with companies that present a valid Pension Clearance Certificate (PCC) issued by PenCom. The directive is part of intensified regulatory efforts to ensure strict enforcement of Section 2 of the Pension Reform Act (PRA) 2014, which mandates all employers in both public and private sectors-including Federal, State, and Local Governments to participate in the CPS and remit pension contributions no later than seven working days after salary payments.