PenCom's New System Links Unpaid Pensions to Contracts

Employers in Nigeria seeking new business opportunities may encounter challenges due to unpaid pension bills, as stated by the National Pension Commission (PenCom). The commission's Director-General, Omolola Oloworaran, announced at the annual media conference in Abuja on October 13 that an automated clearance system will calculate penalties for delayed pension contributions.

This system prevents employers from obtaining a Pension Clearance Certificate until all penalties are settled. The implications of this measure extend beyond pension fund administrators, as suppliers seeking contracts with pension operators will also require clearance, regardless of their direct involvement in managing retirement savings.

The circular issued by PenCom in May 2025 mandated compliance from companies and financial institutions receiving pension investments, including their vendors. Although the new system aims to enforce compliance, it remains unclear how many applications have been blocked or how much additional revenue has been recovered due to these penalties.