The National Social Security Fund (NSSF) has released results of its financial operations between July 2007 and June 2008.

It is really a mixed bag of good and bad things, but largely reflects the fact that it is in need of urgent reforms better attuned to the needs of retirees.

It has grown its contributions from members by 4.1 per cent while net assets have also grown by 11 per cent.

That is the good part, but only in view of the fact that details about valuations of the assets are not yet a public matter.

The bad part is that it still has a disproportionate amount of real estate in form of undeveloped land and buildings compared to the paltry sums in the other instruments such as the safer government securities and corporate bonds.

Ownership of such land and buildings has in the past made the organisation an instrument of patronage where anybody with power could sell it land at highly inflated prices.

Indeed, a rogue manager can still manipulate the system and jeopardise pensioners' assets through corrupt practices.

While land and buildings were worth Sh21 billion by end of June 2008, Treasury bonds were only worth about half of that at Sh11 billion and there was no investment in Treasury bills.

You would expect that a fund for retirees is more about steady and predictable income rather than a one-off appreciation of assets whose prices can still come down.

The recent proposal by the minister for Finance in the 2009/10 budget that NSSF invests only in Treasury bills and bonds, going forward, was a move in the right direction since it is more likely to protect members' funds.

Its cash deposits with financial institutions also look weak at just about a billion shillings.

With the good offers of interest at even 10 per cent for time deposits in some of the commercial banks, NSSF should be in a position to invest more here than even in T-bills offering less than eight per cent per annum.

It has also been seen that the volatility of the equities market as seen from 2007 will impact on the value of members' funds even though this may only be in the short term.

The fund should move with speed and dispose of the undeveloped land and buildings and proceed to re-invest the money in government securities.

Further, there should be a clear investment strategy that does not endanger members' funds.