The National Pension Commission (PenCom) has unveiled a revised regulation that allows pension funds to gain exposure to gold through tradable Gold Receipts listed on Securities and Exchange Commission (SEC)-recognised exchanges.
This innovation enables Pension Fund Administrators (PFAs) to invest in gold without the complexities of physical storage, offering a secure and liquid alternative asset class. Gold Receipts form part of a broader suite of instruments introduced under PenCom’s updated investment guidelines, designed to enhance diversification, boost returns, and reduce concentration risks.
According to the Commission, the review was undertaken in line with its strategic objective of diversifying pension fund investments into alternative asset classes, promoting impact investing, and ensuring real returns on investment to provide enhanced pension benefits for retirees.
The revised regulation expands the scope of permissible instruments to include Reverse Repos, Securities Lending with full central counterparty guarantees, Private Issuance by registered corporate entities, and commodity-backed instruments linked to oil, gold, and agriculture. Derivatives such as futures, forwards, options, and swaps are also permitted, but strictly for risk management purposes.
To rebalance risk and foster long-term growth, PenCom has adjusted allocation limits across major asset classes. Plain vanilla Federal Government Securities have been reduced across all funds, with asset-backed instruments introduced as offsets. Infrastructure Funds now enjoy increased allocation limits, a move consistent with PenCom’s strategy to hedge against inflation and channel more resources toward impact-driven investments.
The regulation also introduces a consolidated framework for non-interest investments and co-investment models, while mandating PFAs and CPFAs to integrate Environmental, Social, and Governance (ESG) factors into their decision-making processes. Greater emphasis has been placed on responsible investing, inclusive growth, and long-term allocation to priority sectors that support sustainable national development.
PenCom further clarified several definitions within the regulatory framework, including refinements to the Ethical Fund category, to ensure transparency and consistency across the pension industry. A new cap has been introduced to limit exposure to any single corporate issuer to 25 percent across the six funds within the Multi-Fund Structure.
The revised regulation signals PenCom’s commitment to transforming Nigeria’s pension system into a globally competitive, resilient, and forward-looking investment vehicle—one that safeguards contributors’ funds, empowers retirees, and supports broader economic development.
This development comes shortly after PenCom unveiled a policy that allows Nigerians living abroad, as well as those earning in foreign currency within Nigeria, to save pensions in United States dollars. The framework, contained in its Guidelines on Foreign Currency Pension Contributions, marks a significant expansion of the Contributory Pension Scheme (CPS). It aims to deepen participation by the Nigerian diaspora while ensuring transparency, accountability, and compliance with global standards.
PenCom explained that the reform was issued under the powers of the Pension Reform Act (PRA) 2014, granting Licensed Pension Fund Operators (LPFOs) the authority to accept, manage, and invest foreign currency contributions while safeguarding contributors’ funds through strict operational and governance requirements.
