Nigeria’s National Pension Commission (PenCom) has increased the allowable investment limits for equities across major Retirement Savings Account (RSA) fund categories, in a move aimed at easing liquidity constraints and improving asset allocation flexibility within the pension industry.
The adjustment, announced in an addendum issued on February 9, 2026, amends the Revised Regulation on Investment of Pension Fund Assets released in September 2025. The new limits take immediate effect and apply to all licensed Pension Fund Administrators (PFAs) and custodians.
PenCom revised Section 9 of the regulation, raising exposure ceilings for ordinary shares as follows:
- RSA Fund I: 30% → 35%
- RSA Fund II: 25% → 33%
- RSA Fund III: 10% → 15%
- RSA Fund VI (Active): 25% → 33%
The regulator described the decision as a targeted response to implementation challenges that emerged following last year’s regulatory overhaul.
Since the 2025 reforms, PFAs have faced constraints in deploying funds efficiently, particularly due to a shortage of qualifying alternative investment instruments. While limits for private equity, infrastructure and other alternatives were expanded, the pipeline of eligible assets has remained thin.
As a result, pension managers have struggled with underutilised allocation limits and excess liquidity within portfolios.
By expanding the equity headroom, PenCom aims to:
- Improve portfolio efficiency
- Provide flexibility in asset allocation
- Reduce idle liquidity
- Enhance long-term returns for contributors
The move signals a pragmatic shift, allowing PFAs to channel surplus funds into the equities market where qualifying alternative assets are insufficient.
Analysts say the policy change could provide fresh institutional support to Nigeria’s capital market.
Blakey Ijezie, founder of Okwudili Ijezie & Co., described the move as timely, noting that pension funds represent one of the largest domestic pools of long-term capital.
Similarly, Tajudeen Olayinka, CEO of Wyoming Capital Partners, said incremental adjustments in pension allocation limits can significantly influence market liquidity and valuation stability.
Industry observers expect the revision to potentially trigger:
- Increased pension-driven equity demand
- Higher NGX turnover in coming quarters
- Improved price discovery
- Moderate support for valuations amid tight monetary conditions
With interest rates elevated and inflationary pressures persistent, stronger equity participation may enhance portfolio yields while maintaining diversification.
