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The Pension Reform Act, 2014 (PRA, 2014) mandates all organizations with at least three employees to participate under the Contributory Pension Scheme (CPS). Consequently, the National Pension Commission (PenCom) issues Pension Clearance Certificates (PCCs) to organizations that apply and have fully complied with the set requirements.

The Public Procurement Act requires the PCC to be submitted as evidence of compliance with the PRA 2014 by all suppliers, contractors, or consultants, soliciting for any contract or business from Federal Government Ministries, Departments, and Agencies (MDAS). However, it should be noted that under the PRA 2014, compliance is not mandatory for organizations that employ less than three persons, but their employees may do so voluntarily, through the Micro Pension Plan (MPP).

Therefore, PCCs are not issued to such organizations by PenCom. Also, the PRA 2014 does not mandate PenCom to issue clearance letters to this category of organizations with less than three employees.

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Requirements for the Pension Clearance Certificate

An organization can obtain the PCC by applying to PenCom and attaching the following:

  • Certified list of employees of the organization as at the end of the last fiscal year;
  • Certified rates of monthly contributions indicating the employer portion (minimum of 10 percent) and employee portion (minimum 8 percent) and,
  • Evidence of remittance of pension contributions for the last three fiscal years for organizations that were in existence for that period and from the date of incorporation/ registration/licensing to the last fiscal year for organizations that were not in existence for up to three fiscal years.
  •  In addition, the organization must also attach evidence of transfer of pension fund and assets for any pre-2004 retirement benefits scheme into the employees’ Retirement Savings Account (RSA) where applicable;
  • Evidence of remittance of all outstanding pension contributions and penalties where applicable; and
  • Evidence of a valid Group Life Insurance Policy, which should include a Certificate of Group Life Insurance, Policy Document and evidence of payment for the policy.

Issues to note in the Application for Pension Clearance Certificate

The processing of PCC applications as designed by PenCom is easy and transparent. The applications are processed within the advertised time frame of 15 working days, provided that all requirements are met. However, a lot of applicants fail to provide the required documents and often submit their applications without regard to the timeline for processing. It is important to emphasize that PenCom does not charge any fees for processing the PCC and issuing it. The PCC issued by PenCom is valid for a period of one year from January to December. However, applications are processed throughout the year and regardless of the date of issuance, the validity of all PCCs expires by 31st December.

Furthermore, in a general notice to all employers, PenCom had warned employers against applying through intermediaries for the PCC, as employers are expected to apply directly to avoid any hitches.

Some of the noted deficiencies in the submissions by organizations include the following:

  • Under remittance of contributions;
  • Non-provision of Group Life Insurance for at least three times total annual emolument of employees;
  • Understating the number of employees and remittance of outstanding pension contributions, as established by the Recovery Agents.

In the event of any deficiency, a notification is forwarded to the applicant for remedial action prior to the issuance of the PCC. However, where the applicant fails to provide the requested documents, the PCC will not be issued. Furthermore, a list of organizations that were issued the PCC is uploaded on the PenCom website ( to facilitate verification by interested parties.

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Consequently, any certificate that is not found on the website is not valid as the list is updated daily. There is also an interface through which the Bureau of Public Procurement (BPP) verifies the PCCs of organizations as PenCom feeds BPP the information on a daily basis.

In 2021, a total of 25,267 PCCs were issued to organizations that met the requirements. Additionally, about N97.87 billion was remitted into the RSAS of 367,145 employees by the 25,267 employers issued with the PCCs last year.

A breakdown of the PCCs issued to organizations in 2021 shows that 9,299 PCCs were issued in the first quarter while 10,299 PCCs were issued in the second quarter, 4,025 PCCs in the third quarter, and 1,526 in the fourth quarter.

Source: PenCom

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