The National Pension Commission has taken a significant step toward enhancing transparency, security, and regulatory compliance in non-interest pension products with the inauguration of the Pension Industry Non-Interest Advisory Committee.
During the inauguration ceremony in Abuja on Monday, PenCom’s Director-General, Omolara Oloworaran, highlighted the initiative as part of the commission’s broader strategy to foster innovation, inclusivity, and sustainability in pension administration.
She explained that the advisory committee would play a vital role in ensuring that non-interest pension schemes align with global best practices while addressing the needs of individuals who prefer financial solutions that reflect their ethical and religious values.
Oloworaran further emphasized that the establishment of the committee demonstrates PenCom’s commitment to financial inclusion, aiming to expand the reach of non-interest pension products across the sector.
“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 stated.
She noted that the increasing awareness of ethical finance principles has fueled the demand for non-interest financial products, necessitating a well-structured advisory framework to guide market development, regulatory policies, and operational standards.
“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.
Chairman of the advisory committee, Prof. Adam Abubakar, underscored the importance of a Shariah compliance monitoring system within Islamic financial institutions.
He pointed out that such a system is essential for ensuring adherence to ethical and religious financial standards, thereby fostering trust and credibility in the sector.
He also highlighted the necessity of strong regulatory oversight to uphold investor confidence and guarantee that non-interest pension products operate in full compliance with ethical finance principles.
The establishment of the advisory committee signals a strategic advancement in strengthening non-interest finance within Nigeria’s pension industry, reinforcing PenCom’s long-term vision of a more inclusive and diversified pension system.
