By Henry Boyo

OUR collective sense of compassion may have become so dulled, overtime, to media reports and media images of emaciated senior citizens, collapsing after waiting endlessly in queues under the hot tropical sun, for verification and payment of pension entitlements.    In reality, the victims of this oppression, have no ethnic or religious colouration, but are all bound by the common index of social deprivation, while the rest of us discountenance the gross abuse of the dignity of aged men and women, who had served their country for most of their lives.

A cross section of pensioners

I’ll end pensioners sufferings in Imo —Nwosu

The unsightly juxtaposition of such horrid spectacles, against the background of alleged impunity, in the misapplication of pension funds, invariably, broke the hearts of many retirees, and cut short the lives of several others. Regrettably, however, pension fund looters often got away with a slap on the wrist as punishment despite the severe social damage they may have 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 to superintend pension funds, while the National Pension Commission (PENCOM) was statutorily mandated to regulate the sub-sector and ensure that pension assets are invested in safe and secure instruments.

The exceptional performance of Pension Administration, after ten years, encouraged the hosting of the first ever World Pension Summit-Africa in Abuja, where former President Jonathan, noted, in his address, 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, accordingly, signed the 2014 Pension Reform Bill into law, to build on the gains of the 2004 Act. The new Act was expected to govern and efficiently regulate uniform pension administration for both public and private sectors, and also “provide 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 was a handsome nest egg of cheap funds which could be deployed to improve power, housing, education, transportation and healthcare infrastructure nationwide, as is the case, in successful economies everywhere, particularly, when domestic funds are largely inaccessible and too expensive, as long term loans for projects with extended gestation.

In reality, pension contributions could be similarly deployed for continuous expansion and upgrading of our social infrastructure; if meticulously managed and regulated in line with the spirit of the 2014 Act, however, the pertinent question, ultimately, is, whether or not, the payment of pensions to retirees, as and when due would meet their expectation of maintaining some semblance of dignity in their lifestyles until they pass on.

Indeed, 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 a facilitated pension payments system may, unfortunately, still not provide adequate protection against the threat of poverty to retirees, as discussions on pension reforms, often, ignores 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, the same amount of money would buy much less of the same basket of goods in December!    Thus, in an economy where inflation, for example, falls by an average of 10% annually, static pension incomes will systematically command less and less goods and services; thus, 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%!

It is for this reason that the rate of inflation in every successful economy is very carefully managed below 3%, with a five to 10-year benchmark for review, so as to protect income values, and also encourage a savings culture.    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 invariably save less, and, this will reduce availability of loanable funds; expectedly; scarcity of investible funds would ultimately also impact negatively on social and economic growth.

Thus, the retrogressive social impact of Nigeria’s year-on-year double-digit average inflation rates, over time, is probably starkly reflected in the weakness of our infrastructural base and the Naira value.    Ultimately, economic growth, employment opportunities and enhancement of social infrastructure and welfare will become seriously challenged by an uncaged, systemic, inflationary surge.

Thus, even if the reforms in the 2014 Pension Act were 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 below 3%, pensioners will invariably still suffer severe shocks with the realization that their pension income will become inadequate to meet their basic needs; thus, sadly, despite the established pension reforms, senior citizens may still not escape penury after a lifetime of service to their fatherland!

The above is a summary of two articles, namely; “Is Poverty the Ultimate Reward for Pension Contributors?”,  and, “2014 Pension Act: Not yet Uhuru for Pensioners”,these articles were published in September 2013 and July 2014 respectively. (

Regrettably, however, the transparent and optimal management of over N8.14tn consolidated Pension funds, presently, clearly remain a challenge; for example, in March 2018, Yakubu Yussuf, an official of the Police Pension Office, was jailed for 6 years, with a N22.9bn fine, by an Abuja High Court, for stealing N24bn Police Pension funds. Alarmingly, Yussuf had earlier been given a two year prison sentence, with an option of N750,000 fine by a federal High Court in Abuja.

Similarly, a former Chairman of the Presidential Pension Reform Task Team, one Abdulrasheed Maina, and his cohorts, allegedly also stole and laundered N14bn Pension funds. EFCC investigations revealed that Maina was deeply involved in stealing the same pension funds he was tasked to protect.

However, when a delegation of the Nigeria Union of Pensioners visited the State House Abuja in January this year (2019), President Buhari assured the delegation that the welfare of Pensioners remained a priority. PMB similarly declared that his administration has also put a stop to dehumanization of Federal Government Pensioners by ensuring prompt payment of entitlements.

Instructively, unless the ‘curse’ of double-digit inflation is exorcised, Nigeria’s pensioners, may indeed receive prompt pension payments, the reality is that such payment will not rescue these senior citizens from the clutches of poverty.


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