The exceptional performance of Pension administration in the last 10 years encouraged the hosting of the first ever World Pension Summit - Africa in Abuja last week; the event coincided with the 10th anniversary of the commencement of the contributory pension scheme in Nigeria. The Pension Reform Act of 2004 was enacted during former President Obasanjo's tenure to enhance efficiency and address the recurrent challenges confronting pension administration. Indeed, before the 2004 Act, Pension Schemes were grossly mismanaged, such that public sensitivity was regularly assailed with the undignifying sight of distressed senior citizens and other retirees, wearily waiting endlessly, in queues to verify their identities before eventually collecting their meager entitlements from those government agencies which were responsible for disbursement. 
The unsightly juxtaposition of such horrid spectacles against the background of impunity in the misapplication of pension funds, broke the hearts of many retirees while cutting short the lives of several others. Regrettably, pension fund looters often got away with a slap on the wrist as punishment despite the pathetic social damage caused. 
The 2004 Act consequently created Pension Fund Administrators (PFA) to ensure judicious management of pension assets; in addition, Pension Fund Custodians, (PFC) were similarly established for the custody of pension funds, while the National Pension Commission (PENCOM) was statutorily mandated to optimally, regulate the sub-sector and also ensure that pension assets are invested in safe and secure instruments. 
President Jonathan noted, at the World Pension Summit last week, that sustained policy innovations and meticulous management made possible by the 2004 Act had successfully facilitated “confidence and credibility in pension administration in Nigeria, such that the fortunes of pension institutions have transited from a deficit of about $12.9bn in 2004 to accumulated pension assets of over (N4tn) $27.2bn by March 2014”. 
Consequently, President Jonathan, had accordingly signed the Pension Reform Bill 2014 into law in order to build on the gains of the 2004 Act. The new Act is expected to govern and efficiently regulate the administration of the uniform pension scheme for both the public and private sectors. Thus, the 2014 Act, according to President Jonathan, “provides an enabling legal environment, which will facilitate the creation of appropriate instruments with which pension assets can be primarily invested on vital infrastructure and real estate development”. 
Evidently, the estimated N4tn pension assets is a handsome nest egg of cheap funds which could be deployed to improve critical areas of infrastructures such as power, housing, education, transportation and healthcare nationwide, particularly when domestic funds are largely inaccessible and certainly too expensive as long term loans for such projects with extended gestation. 
Instructively, successful economies institutionally mobilize their pool of pension funds to address critical infrastructural deprivations while hawkish regulators watchfully restrain the deployment of such funds into volatile markets for speculation and private equity. 
Nonetheless, we must be careful not to judge the yield on our pension assets with a comparison of the much higher returns from investing pension funds in risk free government securities, which inappropriately provide rates of return as high as 17%! Thus, it is imperative to ring-fence pension funds from the attraction of higher returns from those government sovereign loans which have failed to impact positively on our infrastructural deficit and social welfare.
In reality, if meticulously managed and regulated in line with the spirit of the 2014 Act, pension contributions should provide a sustainable funding platform for continuous expansion and upgrading of our social infrastructure; however, the pertinent question remains, whether or not the ultimate payment of pensions to retirees would meet their lifestyle expectation of maintaining some semblance of dignity until they pass on. 
 In reality, if PENCOM effectively performs its functions, pension contributions would be invested in safe instruments with relatively modest but steady yields, so that inadequate funding and tortuously delayed pension payments with the collateral assault on the dignity of pensioners will become history.  However, such facilitated payments system may, unfortunately, still not be adequate protection against the threat of poverty to retirees, as the discussions on pension reforms, have so far, ignored the critical issue of erosion in the value of money. Even the ubiquitous market woman, labourer or housewife knows from experience that, a thousand naira would buy so much food items and consumables in January, but if unrestrained inflation prevails throughout the year, the same amount of money would buy less of the same basket of goods in December!  Thus, in an economy where the purchasing power of incomes, for example, falls by an average of 10% annually, static pension incomes will systematically command less goods and services; for example, a million naira savings in 2014 may just be worth less than the paper it is printed on in 2024, if average year-on-year inflation rates remain as high as 10%!
For this reason, the rate of inflation in more successful economies is very carefully managed below 3% with a five to 10-year benchmark, so as to protect the value of incomes, and also encourage a culture of savings.  Indeed, the greater the value of savings in an economy, the greater would be the funds available for investment; conversely, when high double-digit rate of inflation prevails in any economy, people are less inclined to save, and less funds will therefore become available for investment; such scarcity of investible funds induced by spiraling inflation would inevitably impact negatively on social and economic growth.
Thus, the retrogressive social impact of Nigeria's year-on-year average inflation rate of about 10% over the years is probably starkly reflected in the weakness of our infrastructural base.  Ultimately, economic growth, employment opportunities and enhancement of social welfare and infrastructure will become seriously challenged by systemic uncaged inflationary surge.
So, even if the reforms in the 2014 Pension Act are perfectly managed, future retirees may, indeed, never suffer undue delays and pains in endless queues before collection of their pensions.  Sadly, however, unless our Economic Management Team succeeds in bringing down inflation to international best practice levels of not more than 3%, undoubtedly, pensioners will inevitably still suffer severe shocks with the realization that their pension payments have, ultimately, unexpectedly become inadequate to cater for their basic needs, as a result of government’s failure to restrain inflation; sadly, despite the reforms, senior citizens may consequently still not escape penury after a lifetime of service to their fatherland!   
Advisedly, however, the systemic surplus cash, which primarily drives inflation (too much money chasing few goods), poisons the object of the pension scheme and impedes upgrading of social infrastructure, will become better managed when our Central Bank resists the temptation to keep substituting naira allocations for monthly distributable dollar revenue!! When CBN refrains from this socially and economically destructive payments system, the burden of eternally surplus Naira will be lifted from the economy and inflation would be tamed to best practice levels; only then can we celebrate our pension reforms as socially successful.