Nigeria’s National Pension Commission (PenCom) has raised the allowable investment limits for ordinary shares across key Retirement Savings Account (RSA) fund categories.
The adjustment was announced in an addendum released on Monday, February 9, 2026, to the Revised Regulation on Investment of Pension Fund Assets originally issued in September 2025.
The move is aimed at improving asset allocation efficiency, especially with the noted absence of qualifying assets, especially in alternative assets.
What PenCom is saying
PenCom said that the revision is a targeted response to implementation bottlenecks identified after the 2025 regulatory overhaul.
The Commission revised Section 9 of the regulation, increasing equity exposure caps for multiple RSA fund classes as follows:
- RSA Fund I: 30% → 35%
- RSA Fund II: 25% → 33%
- RSA Fund III: 10% → 15%
- RSA Fund VI (Active): 25% → 33%
The Commission said the changes take immediate effect and apply to all licensed Pension Fund Administrators (PFAs) and custodians.
Why the adjustment matters
According to PenCom, implementation challenges emerged following the 2025 regulatory update, particularly around new limits for ordinary shares, Federal Government of Nigeria (FGN) bonds, and alternative assets.
- A key constraint has been the shortage of qualifying alternative investment instruments, which has prevented PFAs from fully deploying funds within prescribed asset classes.
- The result, the Commission noted, has been underutilization of investment limits and persistent excess liquidity within the pension system.
By expanding equity investment headroom, the regulator aims to provide PFAs with additional flexibility to allocate funds more efficiently while maintaining risk diversification across RSA portfolios.
Market implications according to expert views
Investment experts hailed the move as a well-thought-out initiative, stressing it would provide additional support to the equities market.
- “The policy shift is likely to support domestic equity demand, particularly from institutional investors managing long-term retirement assets,” Mr. Blakey Ijezie, founder of Okwudili Ijezie & Co. (Chartered Accountants), stated.
- “Pension funds remain one of the largest pools of investable capital in Nigeria’s financial system, and incremental adjustments to asset allocation limits can significantly influence capital market liquidity and price discovery,” Mr. Tajudeen Olayinka, the Chief Executive of Wyoming Capital Partners, submitted.
The market operators noted that the development may trigger:
- Changes in pension fund equity allocations in the coming quarters
- Significant impact on NGX market turnover and valuation support
- Increased equity exposure improves portfolio yield in a high-interest-rate environment
- Follow-up measures to expand alternative asset availability
What you should know
In September 2025, PenCom increased the maximum allowable allocation from Pension Fund Administrators (PFAs) to private equity funds from 5% to 10% and 5% to 15% across some funds and introduced 12 rigorous qualifying criteria for PE funds.
- PenCom’s latest revised investment rules are part of a longer-term push to diversify pension portfolios beyond fixed-income securities, which have dominated Nigerian pension assets for years and limited returns amid inflationary pressures.
- The regulator’s broader reforms have cut permissible exposure to traditional government securities while raising allocation limits for equities and alternative classes such as infrastructure and private equity, aimed at boosting returns and broadening institutional investment impact.
This adjustment comes against a backdrop of growing pension-fund assets, which exceeded N26 trillion as of October 2025 as managers diversify to capture higher returns, supporting both capital markets and retirement outcomes.
