Nigeria’s pension industry is under mounting pressure as operators scramble to raise about N276.8bn in fresh capital to comply with new minimum capital requirements set by the National Pension Commission (PenCom).
According to Coronation’s Year in Review and 2026 Outlook on Nigeria, only three Pension Fund Administrators (PFAs) - Stanbic IBTC Pension, Access ARM Pensions and Leadway Pensure - were significantly capitalised above the new N20bn benchmark before the policy was introduced, leaving most of the sector facing a sizeable funding shortfall.
PenCom, under its Pension Revolution 2.0 framework unveiled in September, raised the minimum capital base for PFAs to N20bn and for Pension Fund Custodians to N25bn. PFAs are now grouped into three categories based on assets under management (AUM). Category A includes PFAs with more than N500bn in AUM and requires N20bn plus one per cent of assets above that threshold, while Category B applies to PFAs with less than N500bn in AUM and a flat N20bn requirement. Category C covers special-purpose PFAs.
Under the revised rules, NPF Pensions Limited must hold at least N30bn in capital, while Nigerian University Pension Management Company Limited is required to maintain N20bn.
Although the original deadline for compliance was December 2026, PenCom has extended it to June 2027. The commission’s Director-General, Omolola Oloworaran, announced the six-month extension at the 2025 PenCom Media Conference, giving operators more time to shore up their capital.
To meet the new thresholds, PFAs are expected to rely on a combination of retained earnings, fresh capital injections from shareholders, rights issues or private placements, and mergers and acquisitions.
Coronation analysts said the recapitalisation would affect nearly all operators. “Virtually every PFA will need to raise additional equity over the next 15 months,” the report said, estimating that the industry as a whole requires about N276.8bn in new capital.
A closer look at the numbers shows the scale of the challenge. Stanbic IBTC Pension Managers, with about N5.9tn in AUM and shareholders’ funds of N45.4bn, would require roughly N73.9bn in capital, leaving a shortfall of about N28.5bn. Access ARM Pensions, which manages about N3.5tn in assets and has shareholders’ funds of N22.8bn, faces a capital gap of between N27bn and N28bn. Leadway Pensure, with around N1.8tn in AUM, would need to raise about N25.5bn in additional capital to meet its estimated requirement of N33.1bn.
Other PFAs are also under strain. NPF Pensions, Premium Pensions, Trustfund Pensions and FCMB Pensions - with AUM ranging from N0.5tn to N1.23tn - would need to raise between N4.9bn and N22.6bn each.
Analysts expect the new capital regime to trigger consolidation, similar to the banking sector’s 2004 recapitalisation. Coronation cited the October 2025 sale of Verod Capital’s majority stake in Tangerine APT Pensions as an early sign of restructuring driven by PenCom’s policy.
“Smaller PFAs that struggle to raise N20bn or more may opt to merge with or be acquired by stronger competitors,” the analysts said, adding that more deals are likely as the deadline approaches.
Looking ahead, Coronation expects the number of PFAs to shrink by late 2026, alongside increased capital market activity as operators seek funding. While consolidation could strengthen the industry, analysts cautioned that the process must be carefully managed to avoid disruptions for contributors.
The recapitalisation is also expected to influence investment strategies. Analysts anticipate modest initial allocations to gold-backed exchange-traded funds and commodities in 2026, as well as the possible launch of foreign-currency pension funds for Nigerians in the diaspora.
Meristem Securities, in its own outlook, projected continued growth in pension investment in infrastructure, noting that pension fund exposure to infrastructure assets rose by 49.4 per cent year-on-year to N242.8bn in the first half of 2025, reflecting rising investor appetite for long-term, inflation-hedged assets.
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