The National Pension Commission (PenCom) has mandated Pension Fund Administrators (PFAs) to report any dollar-denominated pension contributions exceeding $10,000 to the Nigeria Financial Intelligence Unit (NFIU) within 24 hours. These reports must include the contributor’s details, the amount, and the purpose of the remittance. Transactions below this threshold that appear suspicious must also be reported in accordance with anti-money laundering regulations.
This framework allows Nigerians abroad and those earning in foreign currency to participate in the Contributory Pension Scheme (CPS). The contributions must be made in U.S. dollars through a specific account.
The key provision includes:
- Structure: 60% of contributions will be accessible under certain conditions; 40% will be preserved until retirement.
- Withdrawals: Will be limited to twice a year after a minimum of six months.
- Investments: Funds will be invested in dollar-denominated securities, like Eurobonds and FGN instruments.
- Reporting: PFAs must submit daily and monthly reports in both dollars and naira.
- Taxation: Contributions are tax-exempt after five years; early withdrawals incur penalties.
These measures aim to enhance transparency, reduce illicit financial flows, and expand pension coverage for Nigerians in the diaspora.
