By our Reporter
The National Pension Commission (PenCom) has introduced a new policy allowing Nigerians in the diaspora and individuals earning in foreign currency within the country to contribute to their pensions in US dollars.
The initiative, detailed in the Guidelines on Foreign Currency Pension Contributions released in September 2025, expands the Contributory Pension Scheme (CPS) and seeks to boost diaspora participation while aligning Nigeria’s pension system with global best practices.
According to PenCom, the framework issued under the Pension Reform Act (PRA) 2014 empowers Licensed Pension Fund Operators (LPFOs) to receive, manage, and invest dollar contributions under strict governance and compliance standards.
Eligibility covers Nigerians living and working abroad, as well as Nigerians and expatriates employed by foreign firms or international organisations in Nigeria who are paid partly or fully in foreign currency. Contributors must provide valid identification, including a National Identification Number, international passport, and details of next of kin. Expatriates working in Nigeria are required to present additional documentation.
All contributions must be made in US dollars, regardless of the currency of earnings, with funds converted before transfer. Pension Fund Administrators (PFAs) will operate dedicated Retirement Savings Accounts (RSAs) for these contributors.
The guidelines stipulate that 60% of savings may be withdrawn for contingencies before retirement, while 40% is reserved strictly for retirement. Withdrawals can only be made after six months of contributions and are limited to twice yearly, with at least two days’ prior notice.
For Nigerians abroad, payments are to be made via Non-Resident Nigerian Ordinary Accounts, while those in Nigeria but earning in dollars must use domiciliary accounts linked to PFAs’ custodial banks. Importantly, banks are barred from charging transfer fees on such contributions.
All dollar contributions will be pooled into a Foreign Currency Dollar Fund managed by PFAs.
