{"id":435896,"date":"2011-06-04T10:12:03","date_gmt":"2011-06-04T10:12:03","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/06\/04\/pension-returns-beat-inflation-rate\/"},"modified":"2011-06-04T10:12:03","modified_gmt":"2011-06-04T10:12:03","slug":"pension-returns-beat-inflation-rate","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/06\/04\/pension-returns-beat-inflation-rate\/","title":{"rendered":"Pension Returns Beat Inflation Rate"},"content":{"rendered":"
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Business Daily<\/a> (Nairobi)<\/p>\n

George Ngigi<\/p>\n

2 June 2011<\/p>\n

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Workers’ retirement savings earned an average return of 27.8 per cent last year, beating the inflation rate for the first time in three years.<\/p>\n

A survey of 124 schemes with segregated investments and having assets of Sh137 billion found a weighted average one-year investment return of 27.8 per cent compared to 10.9 per cent in December 2009 and negative 2.8 per cent in 2008.<\/p>\n

Funds managed by insurance companies had returns of 10.7 per cent in 2010 compared to 8.3 per cent in 2009 and 7.5 per cent in 2008.”With overall inflation at 3.84 per cent to December 2010, scheme members enjoyed significantly positive real rates of return,” said Edward Odundo, the chief executive officer of Retirement Benefits Authority.<\/p>\n

The pensions funds performed better than investors in rental houses who earned average yields of 6.52 per cent, but trailed those at the stock exchange who made average returns of 36 per cent as measured by growth of the Nairobi Stock Exchange-20 share index.<\/p>\n

The authority, however, said that asset values were expected to remain flat in the first half of the year owing to continued withdrawal of funds from the industry following relaxation of the law restricting workers from accessing retirement benefits.<\/p>\n

Under new rules, workers can withdraw their contributions and up to 50 per cent of employer contributions after losing their jobs.<\/p>\n

Declining stock valuations at the bourse and increasing bond interest rates, which have affected bond valuations are also expected to reflect on pension savings.<\/p>\n

The improved investment performance and increased membership saw the pension industry assets grow to Sh451 billion from Sh313 billion the previous year.<\/p>\n

Fund managers invested largely in government securities, which constituted 31.9 per cent (Sh143.6 billion), of the industry assets while quoted equities were 28.9 per cent (Sh130.4 billion).<\/p>\n

Immovable property came third at 17.8 per cent (Sh80 billion).<\/p>\n

Pinebridge, previously AIG, was the fund manager with the largest market share of the retirement benefits assets with a 24.6 per cent stake followed by Genesis with 18 per cent.<\/p>\n

CFC Stanbic, Old Mutual and ICEA made the other top five. The industrial and allied companies was the most preferred sector at the stock exchange with Sh56 billion put in stocks followed by finance and investment segment, which had Sh55 billion invested.<\/p>\n

Mr Odundo said the number of pensioners under National Social Security Fund were two million but active members could be less. Those under individual schemes were 350,000, while 300,000 were under civil service schemes, which are not regulated by RBA. “Of the estimated 15 million employed persons, we have 16 per cent coverage and that is why we are conducting financial literacy to increase this number,” he said.<\/p>\n

The authority partnered with Jua Kali Association, an umbrella bodies of workers in the informal sector to increase inclusion. Mr Odundo said the collaboration had brought in 17,000 new members and were also working closely with the Matatu Owners Association.<\/p>\n

To ensure improved take up of pension schemes RBA has initiated payment of contributions using mobile phone technology.<\/p>\n

Mr Odundo further said that they were working on a concept paper to include Kenyans abroad who usually tend to secure their old age by sending money for investment but which sometimes is squandered by trusted relatives. “Persons in the diaspora approached RBA and sought to have a product developed for them since they are home bound and they would like some form of security when they get here” said Mr Odundo.<\/p>\n

While the diaspora market was showing interest, most professionals in the private sector kept away from retirement schemes opting to put their money in real estate or plough back the profits.<\/p>\n

“When under financial strain it is easy to hold such assets and sell off and with the lump sum one is likely to spend it all” said Mr Odundo. “A lot of them feel they will not retire and will be in the business for life but this is not the case and we wish to encourage them to join individual schemes.”<\/p>\n

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\nPension Returns Beat Inflation Rate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Business Daily (Nairobi) George Ngigi 2 June 2011 Workers’ retirement savings earned an average return of 27.8 per cent last year, beating the inflation rate for the first time in three years. A survey of 124 schemes with segregated investments and having assets of Sh137 billion found a weighted average one-year investment return of 27.8 per cent compared to 10.9 per cent in December 2009 and negative 2.8 per cent in 2008. Funds managed by insurance companies had returns of 10.7 per cent in 2010 compared to 8.3 per cent in 2009 and 7.5 per cent in 2008.”With overall inflation at 3.84 per cent to December 2010, scheme members enjoyed significantly positive real rates of return,” said Edward Odundo, the chief executive officer of Retirement Benefits Authority. <\/p>\n","protected":false},"author":0,"featured_media":416460,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-435896","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-local-news"},"yoast_head":"\nPension Returns Beat Inflation Rate - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/06\/04\/pension-returns-beat-inflation-rate\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Pension Returns Beat Inflation Rate - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Business Daily (Nairobi) George Ngigi 2 June 2011 Workers' retirement savings earned an average return of 27.8 per cent last year, beating the inflation rate for the first time in three years. 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Funds managed by insurance companies had returns of 10.7 per cent in 2010 compared to 8.3 per cent in 2009 and 7.5 per cent in 2008."With overall inflation at 3.84 per cent to December 2010, scheme members enjoyed significantly positive real rates of return," said Edward Odundo, the chief executive officer of Retirement Benefits Authority.\" \/>\n<meta name=\"twitter:creator\" content=\"@ghanamma\" \/>\n<meta name=\"twitter:site\" content=\"@ghanamma\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/\"},\"author\":{\"name\":\"\",\"@id\":\"\"},\"headline\":\"Pension Returns Beat Inflation Rate\",\"datePublished\":\"2011-06-04T10:12:03+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/\"},\"wordCount\":670,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"articleSection\":[\"Local News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/\",\"url\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/\",\"name\":\"Pension Returns Beat Inflation Rate - Ghanamma.com\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2011-06-04T10:12:03+00:00\",\"author\":{\"@id\":\"\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/06\\\/04\\\/pension-returns-beat-inflation-rate\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/#website\",\"url\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/\",\"name\":\"Ghanamma.com\",\"description\":\"News In Ghana - Latest Ghana News Headlines\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.ghanamma.com\\\/2011\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Pension Returns Beat Inflation Rate - Ghanamma.com","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.ghanamma.com\/2011\/06\/04\/pension-returns-beat-inflation-rate\/","twitter_card":"summary_large_image","twitter_title":"Pension Returns Beat Inflation Rate - Ghanamma.com","twitter_description":"Business Daily (Nairobi) George Ngigi 2 June 2011 Workers' retirement savings earned an average return of 27.8 per cent last year, beating the inflation rate for the first time in three years. 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