Effect of Inflation and Currency Devaluation on Real Returns of Pension Funds Retirement Savings Account (RSA) in Nigeria

Nigerian pension industry has demonstrated remarkable resilience and steady nominal growth, outpacing the Nigerian stock index. By the end of 2025, total Pension Net Asset Value swelled to ₦27.45 trillion and Pension Contributions of ₦12.6 trillion as well as Cumulative Retirement Savings Account (RSA) registrations of 11.04 million accounts. However, when measured the growth against headline inflation, the real RSA returns were firmly in the negative for twelve years out of the 20 years of this study. Simultaneously, naira has depreciated from approximately ₦130/1US$ in 2006 to over ₦1,500/1US$ in 2025. Therefore, this paper investigated the effect of inflation and currency devaluation on real returns of pension funds RSA in Nigeria over the period 2006– 2025. This study used annual secondary time series data from the National Pension Commission, National Bureau of Statistics, and Central Bank of Nigeria. Multiple regression analysis was employed and utilized real returns as dependent variable which was derived from nominal fund returns and headline inflation using the Fisher effect relation. Inflation rate, exchange rate, serves as independent variables while nominal return, monetary policy rate, real GDP and FGN Securities were used as control variables. Findings of the study reveal that inflation exerts a negative and statistically significant effect on RSA real returns, and currency depreciation significantly erodes real returns beyond the domestic inflation channel. The paper concludes that structural macroeconomic reforms especially inflation targeting and exchange rate stabilization are necessary preconditions for improving retirement income adequacy in Nigeria's Contributory Pension Scheme.