The National Pension Commission (PenCom) has issued a new addendum clarifying and easing some of the capital requirement reforms it introduced in September 2025 for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs).
This is according to an addendum released by PenCom on November 12, 2025, aimed at addressing stakeholder concerns over the stringent provisions of the original circular.
The update marks a notable policy shift, especially with the inclusion of the Statutory Reserve Fund (SRF) as part of shareholders’ funds and changes in how assets under management (AUM) are computed for surcharge purposes both of which could reduce capital pressure on PFAs.
One of the key amendments in the November 12 addendum is the decision to allow PFAs to include their Statutory Reserve Fund (SRF) when calculating shareholders’ funds for capital adequacy purposes.
This applies across all PFA categories A, B, and C and directly addresses a major point of contention in the original September 26, 2025 circular, which had excluded SRF from qualifying as capital.
This reversal is expected to ease capital-raising pressure, particularly for mid-tier and smaller PFAs, many of whom had warned that the exclusion of SRF would leave them with limited buffers despite having healthy reserve balances.
By recognising SRFfunds that are already retained earnings mandated by regulation—as part of capital, PenCom is effectively softening the initial capital shock and giving room for operators to better align their internal resources with regulatory expectations.
In another important clarification, PenCom adjusted the computation base for the 1% capital surcharge required of Category A PFAs (those with the highest AUM). The Commission stated that the following funds will be excluded from the surcharge calculations:
This significantly narrows the surcharge base and will likely reduce the actual amount of additional capital these PFAs need to raise to comply with the surcharge provision.
Another major change in the November update is the extension of the compliance deadline to June 30, 2027.
This offers PFAs and PFCs an 18-month reprieve beyond what the initial September directive had implied.
The extension comes after significant industry pushback from stakeholders who had raised concerns about the feasibility of meeting the revised capital requirements under tight funding and market conditions.
The new timeline gives operators additional time to:
This amendment is particularly relevant given Nigeria’s current macroeconomic environment, where capital markets remain relatively shallow and borrowing costs are elevated.
Industry operators had earlier criticized the September 2025 capital reform framework, arguing that the requirements were not only abrupt but also failed to reflect the real financial structure of PFAs, especially by excluding SRF.
Some warned that the rule could lead to artificial distress or unnecessary consolidation if left unaddressed.
Some warned that the rule could lead to artificial distress or unnecessary consolidation if left unaddressed.
PenCom appears to have acknowledged these concerns, stating that the addendum was issued “to provide additional clarifications” following feedback from industry players.
The original September circular sought to address three major issues which are to strengthen the capital base of PFAs and PFCs to absorb shocks, as well as enhance their resilience amid rising compliance and technology costs. It is also meant to create a tiered regulatory framework based on size and risk exposure.
While these objectives remain intact, PenCom’s latest revisions show a willingness to take a more pragmatic approach.
By allowing the inclusion of SRF and narrowing the scope of surcharge-relevant AUM, the Commission has signalled it is open to feedback while still pursuing systemic stability.
The September 2025 capital reforms represent the most comprehensive change to pension industry capital rules since the 2011 recapitalisation, which had raised minimum shareholder funds to N1 billion.
The 2025 update introduced a tiered capital model:
The reforms also reflect PenCom’s broader goal of ensuring that PFAs are not just passive custodians but active, well-capitalised investment managers capable of managing Nigeria’s growing pension assets in line with global standards.
For more on Nigeria’s pension reforms and related developments, see Naijaonpoint coverage: