PenCom unveils committee to strengthen non-interest pension

The National Pension Commission has unveiled the Pension Industry Non-Interest Advisory Committee to strengthen transparency, security, and compliance in non-interest pension products.

Speaking at the inauguration in Abuja on Monday, the Director-General of PenCom, Omolara Oloworaran, emphasised that the move aligns with the commission’s commitment to innovation, inclusivity, and sustainability in pension administration.

She stated that the initiative would ensure that non-interest pension schemes adhere to global best practices while catering to individuals seeking financial solutions that align with their ethical and religious beliefs.

Oloworaran noted that the establishment of the advisory committee further highlights PenCom’s drive for financial inclusion, expanding the reach of non-interest pension products within the industry.

“The introduction of Non-Interest Pension Funds (Fund VI) was a groundbreaking step in this direction, as it provides an investment option that is free from interest-based instruments while still ensuring competitive returns for contributors,” she said.

She explained that the rising demand for non-interest financial products, driven by increased awareness of ethical finance principles, made it necessary to establish a structured advisory framework to guide regulatory, operational, and market developments.

“In recent years, the commission has witnessed increasing demand for non-interest financial products, driven by a growing awareness of ethical finance principles and the need for alternative investment avenues.

“However, the development of this segment requires structured guidance, expert insights, and collaborative strategies to navigate regulatory, operational, and market challenges.

“This is precisely why we have established this Advisory Committee—to serve as a think tank, providing recommendations on best practices, governance structures, product development, and compliance with non-interest finance principles,” she added.

The chairman of the committee, Prof. Adam Abubakar, stressed the significance of a Shariah compliance monitoring system in Islamic financial institutions, stating that it plays a crucial role in ensuring compliance, building trust, and enhancing credibility in the sector.

He stressed that regulatory oversight is critical to maintaining investor confidence and ensuring that non-interest pension products operate in line with ethical and religious financial principles.

The inauguration of the advisory committee marks a strategic step in deepening non-interest finance within Nigeria’s pension industry, reflecting PenCom’s long-term vision of a more inclusive and diversified pension system.