By David Akinmola
Nigeria’s pension regulator has raised equity investment limits for Retirement Savings Account (RSA) funds in a decisive move to ease mounting liquidity pressures within the pension system and channel more long-term capital into the equities market.
In an addendum released on Monday, February 9, 2026, the National Pension Commission (PenCom) announced upward revisions to allowable investments in ordinary shares across key RSA fund categories, citing implementation bottlenecks following its 2025 regulatory overhaul and the shortage of qualifying alternative assets.
Under the revised Section 9 of the investment regulation, equity exposure caps were increased to 35 per cent for RSA Fund I (from 30 per cent), 33 per cent for RSA Fund II (from 25 per cent), 15 per cent for RSA Fund III (from 10 per cent), and 33 per cent for RSA Fund VI Active (from 25 per cent). The changes take immediate effect and apply to all licensed Pension Fund Administrators (PFAs) and custodians.
PenCom explained that the adjustment was necessary after PFAs struggled to deploy funds efficiently within existing limits, particularly due to the limited availability of qualifying alternative investment instruments. The constraint, the Commission said, led to underutilised asset classes and persistent excess liquidity across pension portfolios.
By expanding equity investment headroom, the regulator aims to improve asset allocation efficiency while maintaining portfolio diversification, as pension assets continue to grow rapidly.
Market analysts say the move could provide fresh momentum for the Nigerian Exchange (NGX), with pension funds remaining the largest pool of domestic institutional capital.
“The policy shift is likely to strengthen domestic equity demand, especially from long-term institutional investors,” said Blakey Ijezie, founder of Okwudili Ijezie & Co. “Incremental changes to pension asset allocation can have a material impact on market liquidity and price discovery.”
Similarly, Tajudeen Olayinka, chief executive of Wyoming Capital Partners, noted that pension funds play a pivotal role in Nigeria’s financial system, adding that increased equity exposure could improve portfolio yields in a high-interest-rate environment.
Market operators expect the revision to influence pension fund rebalancing decisions in the coming quarters, support market turnover and valuations, and accelerate calls for deeper development of alternative asset classes.
The latest adjustment builds on PenCom’s September 2025 reforms, which expanded pension allocations to private equity funds and introduced stricter qualifying criteria, as part of a broader strategy to reduce over-reliance on government securities.
With pension assets exceeding N26 trillion as of October 2025, the regulator has intensified efforts to diversify portfolios, improve real returns amid inflationary pressures, and deepen the impact of pension capital on Nigeria’s broader economy.
