In September 2025, the National Pension Commission (“NPC”) released the Revised Guidelines on Corporate Governance for Licensed Pension Fund Operators (“Revised Guidelines”) replacing the Guidelines on Corporate Governance for Pension Fund Operators 2021 (“2021 Guidelines”). The Revised Guidelines are to be used in conjunction with the Nigerian Code of Corporate Governance 2018 (NCCG) and take effect immediately and retrospectively, except for few sections that have a 12-month transition period for implementation.

This Newsletter focuses on the changes introduced by the Revised Guidelines.

Scope

The Revised Guidelines are applicable to Pension Fund Administrators, Closed Pension Fund Administrators and Pension Fund Custodians – collectively referred to as Licensed Pension Fund Operators (“LPFO).

Board

Independent Non-Executive Directors

The Revised Guidelines now mandate at least 3 Directors or 30% of the Board (whichever is higher), to be Independent Non-Executive Directors (INEDs)[1]. The Board is mandated to establish procedures to ascertain the independent status of the INEDs, annually.[2] Given the increase in the required minimum number of INEDs, the Revised Guidelines require the Chair of the following Board Committees to be an INED:

Board Investment Strategy Committee
Board Nominations & Governance Committee and;
Board Risk Management Committee.[3]

The Revised Guidelines allow a 12-month transition period for the implementation of the above requirements, except for that related to the Board Risk Management Committee Chair[4]- in respect of which compliance is with immediate effect.

Tenure and Introduction of Principal Owner Concept

The Revised Guidelines retained the 15-year tenure for Non-Executive Directors (NEDs) prescribed by the 2021 Guidelines but introduced the concept of Principal Owners as an exception to this requirement. The Revised Guidelines define a Principal Owner as an individual or entity that directly/indirectly holds at least 51% of the issued share capital of a LPFO.

A Principal Owner may continue to serve on the Board of a LPFO as a NED after the expiration of the 15 – year tenure, subject to the following conditions[5]:

The Board shall not have more than one Principal Owner serving concurrently as a NED
Such a director must not hold executive, management or operational positions and must not be reclassified as an INED on the Board of the LPFO
An external evaluation, focused on the Principal Owner, shall be conducted once every 3 years by a consultant appointed by the LPFO and approved by the NPC. A detailed report of the evaluation and recommendations shall be submitted directly to the NPC, which shall form the basis of the Commission's approval of the continuation of the tenure of the Principal Owner.
The Principal Owner shall be subject to re-election at Annual General Meetings, every 3 years; annual internal performance evaluation by the Board; and annual suitability review by the Nominations & Governance Committee
The Principal Owner (serving under the exemption) is restricted from being the Chair of the following Board Committees-

Board Audit Committee
Board Nominations & Governance Committee
Board Risk Management Committee
Board Remuneration Committee.

Notwithstanding the above, the NPC retains the explicit authority to review or terminate the tenure exemption of Principal Owners in instances of governance concerns, regulatory non-compliance, performance deficiencies or ethical breaches. The Revised Guidelines also grant a 12-month transition period for the implementation of the Principal Owner concept.

Transmutation of Directors

The 2021 Guidelines prohibited Board Chairs that had served out their tenure from transmuting to the MD/CEO of the same LPFO. The Revised Guidelines extended the restriction to cover the NEDs as well.[6]

An individual that had served the maximum regulatory tenure as Managing Director (MD)/ Executive Director (ED) or NED in an LPFO is only allowed to serve as MD/ED/NED in another LPFO after a 3-year cooling – off period and subject to a maximum tenure of 5 years[7].

INEDs are restricted from transmuting to MD/CEO of the same LPFO after the expiration of their tenure. However, a retired INED can serve as MD/CEO of another LPFO after a 3- year cooling- off period. Unlike the case of retired MDs/EDs and NEDs, the Revised Guidelines did not prescribe maximum tenure for the transmuting INEDs[8].

Meetings

The Board and Board Committees are required to hold a minimum of one in-person meeting, annually and each Director is required to attend at least one in-person meeting, in addition to the virtual meetings[9].

Board Evaluation

Unlike the 2021 Guidelines that give the Board of LPFOs the discretion to conduct board evaluation internally or by an independent external consultant, the Revised Guidelines now mandate LPFOs to engage the services of the external consultant to conduct the board evaluation exercise at least once every 2 years[10]. However, an LPFO is still required to submit an annual Corporate Governance Evaluation Report to the NPC, not later than 3 months after its financial year-end[11].

Given that most of sections the Revised Guidelines take immediate effect (except the few areas highlighted earlier) companies in the pension industry are enjoined to prioritize the implementation of the provisions thereof, to avoid regulatory sanctions.

[1] S. 2.2.7 of the Revised Guidelines on Corporate Governance for Licensed Pension Fund Operators 2025.

[2] S. 2.3.5.3 of the Revised Guidelines

[3] S. 2.7.1, S. 2.9.1 and S. 2.10.1 of the Revised Guidelines

[4] S. 8.2 of the Revised Guidelines

[5] S. 2.25.9 of the Revised Guidelines

[6] 2.15.6 of the Revised Guidelines

[7] S.2.15 of the Revised Guidelines

[8] S. 2.15.7

[9] S. 2.5.4

[10] S.2.13.3

[11] S.2.14.1