Pension recapitalisation triggers first major merger as Premium, Trustfund combine

Ahead of a sweeping recapitalisation deadline that will reshape Nigeria’s pension industry, two of the country’s largest Pension Fund Administrators (PFAs), Premium Pension and Trustfund Pensions, have unveiled plans to merge, marking the first major consolidation move triggered by the new capital regime.

The proposed merger, which is subject to regulatory approvals, signals the beginning of what industry operators expect will be a wave of mergers and acquisitions as pension firms race to meet the National Pension Commission’s (PenCom) enhanced capital requirements before the June 2027 deadline.

Under the transaction, the combined business will operate as Premium Trustfund Pensions Limited, creating what is projected to become Nigeria’s third-largest pension fund administrator by assets under management.

Premium Pension currently manages N1.8 trillion in assets under management for more than 860,000 clients, while Trustfund Pensions oversees over N1.23 trillion in pension assets. Together, the proposed merging entity would manage nearly N3 trillion in pension assets, making it one of Nigeria’s largest PFAs after the likes of StanbicIBTC Pensions Managers Limited and AccessARM Pensions Limited.

The planned merger was disclosed in a merger notification, quoting the Federal Competition and Consumer Protection Commission (FCCPC).

The development comes months after PenCom reaffirmed that all licensed Pension Fund Administrators (PFAs) must comply with the new minimum capital requirements by June 2027 or risk losing their operating licences.

Under the revised framework, PFAs managing assets below N500 billion are required to maintain a minimum capital of N20 billion, while those with assets exceeding N500 billion must hold N20 billion plus one percent of the portion of assets above N500 billion.

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The tougher capital thresholds, introduced by PenCom in September 2025, are designed to strengthen the financial resilience of pension operators, improve governance and position the industry to manage the country’s rapidly expanding pension assets, which have grown beyond N31 trillion.

Speaking at the 2025 Pension Revolution Summit in Lagos, Omolola Oloworaran, director-general, PenCom made it clear that operators unable to independently meet the capital threshold should pursue mergers or acquisitions.

“We have communicated the requirements to PFAs, and we expect every PFA to be compliant by June 2027. Any PFA that is not compliant will have its licence revoked. It’s that simple,” she said.

She added that discussions with operators indicate that consolidation has become inevitable.

“Based on our engagements, all PFAs will either meet the requirements on their own or find partners to merge with. So, you may see some mergers and acquisitions.

“What I can tell you is that recapitalisation is on track. The industry agrees with us. They really have no choice but to recapitalise.”

The Premium Pension-Trustfund transaction appears to validate that prediction, making it the first high-profile consolidation directly linked to the recapitalisation programme.

According to the FCCPC notification, the merger will be implemented through a Scheme of Merger under Section 711 of the Companies and Allied Matters Act (CAMA) 2020.

“The merger affects the Nigerian Pension Fund Administration (PFA) market. Premium Pension and Trustfund Pensions are currently the fifth and sixth largest PFAs, respectively. Following the merger, the combined entity is projected to rank third,” the commission stated.

As part of the arrangement, all assets, liabilities and undertakings of Premium Pension will be transferred to Trustfund Pensions, after which Premium Pension will be dissolved without being wound up.

Both firms have long-standing footprints in Nigeria’s pension industry. Trustfund Pensions was incorporated in 2004 and licensed by PenCom in December 2005, while Premium Pension was incorporated in 2005 and received its operating licence the same year.

Together, they currently administer Retirement Savings Account (RSA) Funds I to VI, including the Micro Pension Fund targeted at workers in the informal sector, non-interest Shari’ah-compliant funds, Approved Existing Schemes, the Transitional Contributory Fund and Voluntary Contributions across the 36 states and the Federal Capital Territory.

The companies said the merger would create significant operational and financial synergies, enabling the combined entity to improve efficiency, optimise costs, strengthen investment management capabilities and expand service delivery through a wider branch network and enhanced digital platforms.

They also said the enlarged institution would be better positioned to diversify its pension products and deepen coverage across Nigeria’s formal and informal workforce.

The transaction underscores how PenCom’s recapitalisation policy is beginning to reshape the competitive landscape of the pension industry, with stronger operators expected to emerge through consolidation while weaker firms either raise fresh capital, merge or exit the market before the regulatory deadline.