The National Pension Commission (PenCom) has officially raised the investment limits for ordinary shares across the multi-fund structure, a move that analysts believe will channel significant new liquidity into the Nigerian Exchange (NGX).
This policy shift, announced on February 10, 2026, is a direct response to a persistent inflationary environment that has historically eroded the real returns of the fixed-income-heavy portfolios favored by local Pension Fund Administrators (PFAs).
By allowing a higher percentage of assets to be allocated to equities, the regulator aims to help pension funds achieve growth that outpaces the rising cost of living.
Under the revised guidelines, the ceiling for variable income instruments has been adjusted across three key fund types. Fund I, which is the most aggressive and caters to younger contributors, has seen its equity cap increased from 30% to 35% of portfolio value. Fund II, the balanced fund and the largest by asset volume, has had its limit raised from 25% to 33%.
Even Fund III, the conservative fund for those nearing retirement, now allows for up to 15% exposure to ordinary shares, providing a necessary buffer against inflation for older contributors.
Market watchers expect this “bullish signal” to trigger a liquidity surge in the coming quarters, as even a marginal shift from fixed income to equities could translate into an inflow of over N210 billion into blue-chip stocks.
This shift coincides with a flattening yield curve on government bonds, prompting fund managers to seek higher returns in the stock market.
However, PenCom has maintained strict “Single Entity Exposure Caps” to prevent concentration risk, ensuring that no PFA holds more than 25% of its assets in a single corporate issuer.
This regulatory evolution comes as the pension industry navigates a major consolidation wave ahead of the December 2026 recapitalisation deadline. With PFAs now required to hold a minimum capital of ¥20 billion, the industry is becoming more robust and capable of managing complex equity portfolios.
By broadening the range of permissible instruments to include derivatives and gold-backed receipts alongside higher equity caps, PenCom is transforming the N21 trillion pension industry into a dynamic reservoir of long-term capital that can better support Nigeria’s broader economic growth.
 has officially raised the investment limits for ordinary shares across the multi-fund structure, a move that analysts believe will channel significant new liquidity into the Nigerian Exchange (NGX).){kind=link}