The National Pension Commission (PenCom) has introduced a fresh set of investment guidelines that, for the first time, allow pension funds to invest in gold through exchange-listed Gold Receipts recognised by the Securities and Exchange Commission (SEC).
The move provides pension fund administrators (PFAs) with a secure and tradable way to diversify into gold, removing the challenges associated with storing the physical commodity. It also adds a liquid alternative asset class to their portfolios.
According to the regulator, the update is part of a broader effort to diversify pension investments, reduce concentration risks, and improve returns for contributors. PenCom said the revised framework reflects its strategy of encouraging investments in alternative asset classes while maintaining real returns for retirees.
Beyond gold, the regulation expands the list of instruments pension funds can access, such as Reverse Repos, securities lending backed by central counterparty guarantees, private issuances by registered corporates, and commodity-linked securities tied to oil, gold, and agriculture. Derivatives—including futures, forwards, swaps, and options—are also permitted, though strictly for risk management.
To strike a balance between risk and growth, PenCom adjusted portfolio limits across asset classes. For instance, the share of plain government securities has been cut back, with more room given to infrastructure funds and asset-backed instruments that support long-term economic growth and hedge against inflation.
The guidelines also strengthen governance by mandating PFAs and Closed Pension Fund Administrators (CPFAs) to adopt Environmental, Social, and Governance (ESG) principles in their investment decisions. Ethical funds were further clarified to ensure transparency, while exposure to any single corporate issuer is now capped at 25% across the multi-fund structure.
This reform comes on the heels of PenCom’s new foreign currency pension framework, which permits Nigerians abroad and residents earning in foreign currency to make contributions in U.S. dollars. Released in September 2025, that policy broadened the Contributory Pension Scheme (CPS) to attract diaspora participation and align with global best practices.
Together, these initiatives reflect PenCom’s ambition to build a more resilient, diversified, and globally competitive pension system that safeguards retirement savings while contributing to national development.