Pension Fund Administrators (PFAs) have been urged to translate their stronger capital base into improved service delivery, better technology infrastructure and wider pension coverage, as experts warn that recapitalisation alone will not guarantee sustainable growth in the industry.
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The former Chief Executive Officer of the Pension Operators Association of Nigeria (PenOp), Oguche Agudah, gave the warning at the 11th yearly conference of the Nigerian Association of Insurance and Pension Editors (NAIPE) in Lagos, stressing that operators must strengthen their business models, workforce capacity and regulatory compliance to remain competitive.
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Agudah, who is the Founder and Managing Partner of HRISP Partners, said pension operators needed to look beyond meeting regulatory capital requirements and develop strategies to respond to changing market conditions, rising customer expectations and emerging business opportunities.

‎Presenting a paper titled, “Post-Recapitalisation and Market Dynamics in the Nigerian Pension Industry,” he identified five critical priorities under the acronym SCOPE: Scale; Compliance and Regulatory Awareness; Organisational Adoption of Technology; People Strategy and Culture; and External Engagement and Differentiation.
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“Recapitalisation is not the end of the business; it is just a piece of the puzzle,” Agudah said, explaining that the success of the exercise would depend on how operators deployed their additional capital to improve operational efficiency, expand their market reach and deliver better outcomes for pension contributors and retirees.

‎Under the scale component, he cited business combinations involving Trustfund Pensions and Premium Pension, as well as Leadway and PAL Pensions, as examples of consolidation in the industry.

According to him, consolidation could help operators reduce operating costs, achieve economies of scale, strengthen management capacity and improve their ability to invest in technology and specialist personnel.
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However, he cautioned that mergers and other business combinations must produce measurable improvements in operational efficiency and service delivery rather than merely increase the size of participating institutions.
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The pension industry’s recapitalisation exercise is designed to strengthen operators’ financial capacity, improve resilience and position the sector for greater participation in Nigeria’s economic development.
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Under the requirements outlined in Agudah’s presentation, PFAs are expected to increase their minimum capital from N5 billion to N20 billion by June 30, 2027, while Pension Fund Custodians are required to raise their minimum capital to N25 billion within the same period.
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PFAs with assets under management exceeding N500 billion are also subject to an additional capital requirement of one per cent under the applicable regulatory directive.
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Agudah said operators must prepare for other regulatory developments, including guidelines for cross-border pension contributions, reviews of investment guidelines, enhanced corporate governance requirements and initiatives to expand participation in the Personal Pension Plan.
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He also identified frameworks relating to pension compliance certificates, pension contributions and additional benefits for retiring civil servants as developments operators must incorporate into their business strategies.
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He urged pension firms to move away from treating compliance as a routine administrative responsibility, noting that regulatory awareness and preparedness would be essential to managing risks and sustaining business growth.
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On technology, Agudah called on operators to embrace digital solutions and artificial intelligence to simplify processes, improve efficiency and enhance the experience of contributors.
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He, however, warned that technology adoption must be supported by effective cybersecurity systems to protect contributors’ personal information and retirement savings against fraud, data breaches and other emerging risks.
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He also stressed the importance of human capital, saying operators would require skilled personnel, effective leadership and a workplace culture that supports innovation, accountability and organisational growth.
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Agudah further identified market differentiation and stakeholder engagement as essential to the industry’s future, urging operators to develop clear value propositions and communicate more effectively with contributors, employers and other stakeholders.
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He said changes in the ownership structure of the industry would make it increasingly important for operators to understand their competitive positions and identify areas where they could improve service delivery.
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The need to translate recapitalisation into improved services also underscores the importance of effective regulation, particularly as the industry prepares for a new phase of reforms.
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The Director-General of the National Pension Commission (PenCom), Omolola Oloworaran, leads the commission responsible for ensuring that pension operators comply with applicable regulatory requirements, maintain sound governance structures and protect contributors’ retirement savings.
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PenCom’s regulatory role remains critical to ensuring that stronger financial capacity supports improved service delivery, responsible pension fund management and greater public confidence in the retirement savings system.
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As operators prepare for the next phase of reforms, the commission will also be central to efforts to expand pension coverage, strengthen compliance and improve the quality of services available to contributors.
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The emphasis on stronger institutions comes as the industry faces the challenge of extending pension participation to self-employed workers and others outside the formal Contributory Pension Scheme.
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Low pension awareness, limited coverage among self-employed workers, compliance gaps and difficulties in reaching potential contributors remain among the issues confronting efforts to deepen pension inclusion.
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The industry’s next phase of reform will therefore require operators to demonstrate that stronger balance sheets can support efficient pension administration, transparent investment decisions, responsive customer service and timely access to retirement benefits.
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Digital platforms could help PFAs provide contributors with easier access to account information, faster complaint resolution and more convenient services.
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They could also improve access for self-employed workers and small businesses, provided the platforms are secure, accessible and supported by adequate public education.
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Similarly, consolidation could strengthen operators’ capacity to invest in technology and specialised expertise, although the benefits would depend on effective integration, sound corporate governance and continued regulatory oversight.
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For contributors and retirees, the ultimate test of recapitalisation will not be the amount of capital raised but whether the reforms translate into more efficient administration, greater confidence in the pension system and improved access to retirement benefits.