PenCom Raises Equity Investment Limits for RSA Funds to Ease Liquidity Pressure

Nigeria’s National Pension Commission (PenCom) has announced an upward revision of equity investment limits for Retirement Savings Account (RSA) funds, a move aimed at easing liquidity constraints and improving asset allocation efficiency.

The adjustment, contained in its recent addendum released to the Revised Regulation on Investment of Pension Fund Assets issued in September 2025, takes immediate effect.

Under the new rules, RSA Fund I’s equity cap has been raised from 30 per cent to 35 per cent, RSA Fund II from 25 per cent to 33 per cent, RSA Fund III from 10 per cent to 15 per cent, and RSA Fund VI (Active) from 25 per cent to 33 per cent.

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PenCom explained that the revision responds to implementation bottlenecks identified after the 2025 regulatory overhaul, particularly the shortage of qualifying alternative assets. This shortage had left Pension Fund Administrators (PFAs) with excess liquidity and limited options for deploying funds. By expanding equity investment headroom, the regulator aims to give PFAs more flexibility while maintaining diversification.

Market experts welcomed the move, noting that it would boost demand for equities and support liquidity in the Nigerian Exchange.

According to Mr Blakey Ijezie of Okwudili Ijezie & Co., pension funds represent one of the largest pools of investable capital in Nigeria, and incremental adjustments to allocation limits can significantly influence market turnover and price discovery.

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Mr Tajudeen Olayinka, CEO of Wyoming Capital Partners, added that the policy shift would improve portfolio yields in a high-interest-rate environment.

The development is expected to trigger changes in pension fund equity allocations in the coming quarters, support NGX valuations, and encourage broader diversification. Analysts also anticipate follow-up measures to expand the availability of alternative assets.

PenCom’s latest reforms build on its September 2025 decision to raise private equity fund allocations and introduce stricter qualifying criteria. With pension assets exceeding N26 trillion as of October 2025, the regulator’s broader strategy is to reduce reliance on government securities and strengthen exposure to equities, infrastructure, and private equity, thereby enhancing returns and retirement outcomes.