Business
Recapitalisation: PFAs race to raise N276b estimated capital gap
PENSION word on block concept.
- Deadline countdown begins as PenCom insists on no turning back
Nigeria’s pension industry is heading into a decisive phase as Pension Fund Administrators (PFAs) confront an estimated N276.8 billion capital gap ahead of the June 2027 recapitalisation deadline set by the National Pension Commission (PenCom).
With roughly 17 months left on the clock, the recapitalisation exercise, described by regulators as critical to safeguarding contributors’ funds, has intensified pressure on operators and is already reshaping the structure of the industry through mergers and acquisitions.
This is just as PenCom Director-General, Ms Omolola Oloworaran, has made it clear that the regulator will not retreat from the new capital regime.
“There is no turning back on recapitalisation,” Oloworaran has said, stressing that any operator that failed to meet the new requirements by the deadline risked losing their licences.
Before the latest recapitalisation mandate, the total shareholders’ fund which is also regulatory capital of Nigeria’s pension industry stood at about N156.54 billion as of the end of 2020.
At the time, PFAs were operating under a N1 billion minimum capital requirement, which had been in place since 2011.
Concerned that this level of capital no longer matched the rapid growth in pension assets, PenCom initiated a series of recapitalisation reforms to strengthen the financial base of operators.
First wave: N1bn to N5bn
The first major phase occurred during the 2021/2022 recapitalisation exercise, when PenCom raised the minimum regulatory capital for PFAs from N1 billion to N5 billion.
By the April 27, 2022 deadline, all surviving PFAs had complied, but not without industry shake-ups. The exercise triggered a wave of mergers and acquisitions that reduced the number of PFAs from 22 to 20.
Following that exercise, the industry’s total shareholders’ fund rose significantly, reaching N211.27 billion by August 2022, reflecting the impact of fresh capital injections and consolidation.
Pension Revolution 2.0
In September 2024, PenCom announced a far more ambitious recapitalisation programme often described within the industry as “Pension Revolution 2.0” to align operators’ capital with the exponential growth in pension assets.
Under the new framework, PFAs with assets under management (AUM) below N500 billion must maintain a minimum capital base of N20 billion.
PFAs with AUM above N500 billion are required to hold N20 billion plus one per cent of the excess AUM.
Existing operators however, have until June 2027 to fully comply.
This sharp increase in capital requirements has created a wide funding gap. Industry estimates put the additional capital required across PFAs at about N276.8 billion, underscoring the scale of the challenge.
Consolidation accelerates
The recapitalisation drive has already deepened consolidation in the industry. From 20 PFAs after the 2022 exercise, the number has fallen further to 18 PFAs as of early 2026, following a new round of mergers and acquisitions.
Notable transactions between 2021 and 2026 include FCMB Pensions acquiring AIICO Pension Managers and First Guarantee Pension; Access ARM Pensions, formed from the merger of Access Pensions and ARM Pension Managers in 2024; Guaranty Trust Pension Managers acquiring Investment One Pension Managers; and Norrenberger acquiring IEI-Anchor Pension Managers.
The latest transactions are Leadway Pensure PFA acquiring PAL Pensions; and the merger of Tangerine Pensions and APT Pension Funds, now operating as Tangerine APT Pensions.
Industry analysts expect more deals before 2027 as weaker operators seek survival through partnerships, equity sales or outright acquisitions.
Why PenCom is firm
PenCom argues that stronger capital buffers are essential to protect contributors and ensure PFAs can manage increasingly large and complex pension portfolios.
Nigeria’s pension assets have grown rapidly, reaching N22.51 trillion by December 2024 and rising further to N27.45 trillion by December 2025, according to PenCom’s unaudited industry portfolio report. The December 2025 figure represented a N399.27 billion month-on-month increase.
Regulators say this growth makes it imperative for PFAs to have the financial muscle, digital capacity and governance strength to manage risks effectively.
Final countdown
With PenCom insisting there will be no extension beyond June 2027, the recapitalisation exercise has become a defining test for Nigeria’s pension industry.
While stronger operators are expected to emerge as “super-PFAs,” others may disappear through consolidation or licence withdrawal. For contributors, the outcome will shape who manages their retirement savings in the years ahead—and how resilient the system will be in the face of future shocks.
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