PenCom Suspends Equity Contribution Applications from Seven Primary Mortgage Banks

The National Pension Commission (PenCom) has suspended the processing of equity contribution applications from seven Primary Mortgage Banks (PMBs) over alleged violations of its housing loan guidelines.

In a circular dated August 11, 2025, signed by Obiora Ibeziako, Head of the Benefits and Insurance Department, PenCom directed all Pension Fund Administrators (PFAs), Closed PFAs, and Pension Fund Custodians (PFCs) to immediately halt the acceptance and processing of such applications from the affected institutions.

“Following the cited letter, the Commission instructs that Pension Fund Administrators, including Closed Pension Fund Administrators and Pension Fund Custodians, immediately stop accepting or processing equity contribution applications submitted by the following Primary Mortgage Banks,” the notice read.

The affected banks are:

• Jigawa Savings & Loans Limited
• FHA Mortgage Bank Limited
• Delta Trust Mortgage Bank Limited
• AG Mortgage Bank Limited
• Infinity Trust Mortgage Bank Plc
• First Trust Mortgage Bank Limited
• Mutual Alliance Mortgage Bank Limited

Although PenCom did not provide specific reasons for the clampdown, industry analysts suggest the action may be linked to the failure of some mortgage banks to generate mortgages tied to pension-backed equity contributions already approved.

Background: Pension-Backed Mortgage Contributions

PenCom introduced the equity contribution initiative for residential mortgages in September 2022. Under the policy, Retirement Savings Account (RSA) holders can apply up to 25% of their RSA balance as equity contribution toward acquiring a residential mortgage. The scheme was designed to ease access to homeownership and deepen the benefits of the Contributory Pension Scheme (CPS).

However, concerns have grown over the ability of some mortgage banks to meet compliance standards and effectively channel approved pension contributions into viable housing projects.

Pension Assets on Steady Growth Path

Despite the regulatory suspension, pension fund assets in Nigeria have continued to expand. As of February 2025, total pension assets under management stood at N23.26 trillion, a 1.77% increase from N22.86 trillion recorded in January.

• Federal Government securities remain the largest investment class, accounting for N14.46 trillion or 62.18% of the total net asset value (NAV).
• Growth in pension assets has been attributed to strategic asset allocation and diversification by PFAs.

PenCom’s Director-General, Ms. Omolola Oloworaran, said the growth in pension assets underscores confidence in the CPS, particularly as more states begin to comply with pension laws.

“As of February 2025, total pension assets under management have surpassed N23 trillion, highlighting the increasing confidence in the Nigerian pension system,” Oloworaran stated.

She noted, however, that adoption across states remains uneven:

• 25 states and the Federal Capital Territory (FCT) have enacted CPS legislation.
• Only 8 states have fully implemented the scheme.

Outlook

The suspension of equity contribution applications from the seven mortgage banks is expected to slow down access to pension-backed housing finance in the short term. However, PenCom maintains that strict enforcement of compliance standards is necessary to safeguard contributors’ funds and ensure that the pension-backed mortgage scheme achieves its long-term goal of expanding homeownership in Nigeria.