By Taiye Olayemi/Esenvosa Izah
Lagos, Dec. 18, 2025 (NAN) – The National Pension Commission (PenCom) has issued a definitive clarification, quelling industry speculation by confirming that the deadline for the mandatory recapitalisation of Pension Fund Administrators (PFAs) remains June 2027. The commission’s Director-General, Ms Omolola Oloworaran, emphatically dismissed rumours of a suspension, framing the exercise as a critical pillar for the long-term stability and growth of Nigeria’s pension industry.
Speaking at the 2025 PenCom Media Conference in Lagos, themed “Pension Revolution Summit: A 365-Day Scorecard,” Oloworaran stated, “Recapitalisation has not been suspended. We have communicated the requirements to the PFAs, and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence.” This unambiguous stance underscores PenCom’s commitment to enforcing the new capital regime, which is designed to create stronger, more resilient PFAs capable of managing Nigeria’s rapidly growing pension assets, which exceed N20 trillion.
Understanding the Recapitalisation Framework
The DG’s announcement reinforces the detailed framework PenCom released in a circular dated September 26, 2025. The new capital requirements are tiered and significantly higher than previous levels:
- For PFAs with Assets Under Management (AUM) below N500 billion: A fixed minimum capital of N20 billion.
- For PFAs with AUM of N500 billion and above: A base of N20 billion, plus 1% of the excess AUM above N500 billion. This scalable model ensures capital requirements grow in tandem with the size and complexity of the PFA’s operations.
- Special Cases: NPF Pensions Ltd. requires N30 billion, while the Nigerian University Pension Management Company Ltd. must maintain N20 billion.
- For Pension Fund Custodians (PFCs): The requirement has been dramatically raised from N2 billion (set in 2004) to N25 billion plus 0.1% of Assets Under Custody (AUC).
This structure is not merely about larger balance sheets. Its core objectives are to enhance operational efficiency, improve risk management capabilities, foster innovation in product offerings, and ultimately ensure that PFAs can deliver better returns and services to Retirement Savings Account (RSA) holders.
Industry Consolidation on the Horizon
Oloworaran indicated that the industry’s response has been proactive, with widespread acceptance of the policy’s necessity. “You may see some mergers and acquisitions in the industry,” she noted, highlighting the expected path to compliance for many operators. This consolidation wave is anticipated to reduce the number of PFAs, leading to a more streamlined industry with fewer, but significantly stronger, entities. For RSA holders, this could translate into more robust institutions with greater investment expertise and technological infrastructure.
Beyond Recapitalisation: Tackling Systemic Challenges
The Media Conference also served as a platform to address other pivotal challenges within the pension ecosystem. The DG identified employer compliance with pension remittances as a major regulatory hurdle. To combat this, PenCom is pursuing a multi-agency enforcement strategy.
“We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees,” Oloworaran said, referencing a Memorandum of Understanding with the Independent Corrupt Practices and Other Related Offences Commission (ICPC). These collaborations aim to name, shame, and sanction defaulting employers, with the DG reporting that recovery efforts are already yielding significant results. She specifically acknowledged lingering non-compliance in certain sectors, including parts of the media industry.
Streamlining Operations and Future Initiatives
On operational improvements, PenCom has taken steps to reduce bureaucratic friction. The DG announced streamlined documentation requirements for public sector workers and participants in the Personal Pension Plan, a move designed to ease enrolment and expedite benefit access. Furthermore, mandatory awareness and advocacy programmes by PFAs across the six geopolitical zones are set to resume, aiming to deepen financial literacy and pension participation nationwide.
Regarding post-retirement benefits, Oloworaran clarified the distinction between the public and private sectors. PenCom is collaborating with the Office of the Head of Service to develop a structured gratuity payment framework for public sector workers. Conversely, in the private sector, gratuity remains entirely at the employer’s discretion, separate from the mandatory pension contribution scheme.
In her closing remarks, the DG reaffirmed PenCom’s holistic mission: “strengthening regulation, improving compliance and safeguarding the pension rights of Nigerian workers and retirees.” The June 2027 recapitalisation deadline is a cornerstone of this mission, setting the stage for the next phase of Nigeria’s pension revolution.
(NAN) (www.nannews.ng)
PTB/ EEI/AIO
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Edited by Oluwafunke Ishola
