Nigeria’s pension industry is unlikely to face major market disruption as Pension Fund Administrators (PFAs) race to meet the new minimum capital requirements set by the National Pension Commission (PenCom), industry experts have said.
According to analysts, most leading PFAs are already well capitalised, reducing the risk of instability or widespread consolidation within the sector. While smaller operators may experience some pressure, the overall structure of the pension market is expected to remain largely intact.
PenCom, in a circular issued on September 26, 2025, revised the minimum capital requirements for Licensed Pension Fund Administrators (LPFAs) and Pension Fund Custodians (PFCs), giving operators until June 30, 2027, to recapitalise or risk losing their licences.
Under the new framework, PFAs with assets under management (AUM) below ₦500 billion are required to maintain a minimum capital base of ₦20 billion. PFAs with AUM of ₦500 billion and above must have ₦20 billion plus one percent of the portion of assets exceeding ₦500 billion. Special purpose PFAs, including NPF Pensions Limited, are required to recapitalise with ₦30 billion, while Nigerian University Pension Management Company Limited will recapitalise with ₦20 billion.
Existing PFCs are required to maintain ₦25 billion plus 0.1 percent of assets under custody, while a new PFC licence will also require ₦25 billion.
Dave Uduanu, immediate past Managing Director of Access ARM Pensions Limited, said the recapitalisation drive would not significantly disrupt the industry, as most major PFAs already meet or exceed the new capital thresholds.
“I don’t think there will be merger pressure because many of the players already have the required capital of ₦20 billion,” Uduanu said.
He noted that although smaller operators may feel the impact, the sector is already dominated by a few large PFAs controlling between 70 and 80 percent of pension assets, making further consolidation unlikely.
Uduanu added that the most notable impact of the policy would be on new entrants, as raising ₦20 billion to start a PFA would be difficult. He also said that large firms whose assets exceed certain thresholds may need to raise additional capital, but this would be manageable through retained earnings or shareholder contributions.
Echoing similar views, Agudah Oguche, former Chief Executive Officer of the Pension Fund Operators Association of Nigeria (PenOp), said the industry is unlikely to experience structural disruption, noting that most PFAs are backed by strong institutional owners.
“I see the PFAs wanting to remain independent at the end of the recapitalisation,” Oguche said, adding that the sector still has significant growth potential, with only about 11 million workers currently enrolled in the Contributory Pension Scheme.
Oguche said the two-year recapitalisation window gives operators enough time to comply, stressing that the key issue would be how PFAs utilise the additional capital to improve returns, service delivery and innovation.
PenCom reaffirmed in December 2025 that the recapitalisation exercise remains on track, warning that PFAs that fail to comply by the June 2027 deadline risk losing their operating licences.
Speaking at the 2025 Pension Revolution Summit in Lagos, PenCom Director-General, Omolara Oloworaran, said non-compliant PFAs have the option of mergers or acquisitions to meet the requirements.
“We expect every PFA to be compliant by June 2027. Any PFA that is not compliant will have its licence revoked,” she said, adding that the commission anticipates some mergers and acquisitions but expects full industry compliance by the deadline.
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