Practices and Challenges of Ethiopian Social Security Agency Pension Funds Investment
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Date
2012-06
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A.A.U
Abstract
This study was undertaken to assess the practices and challenges of pension funds
investment in Ethiopian Social Security Agency. The primary data were collected from
seven key informants who had specialized knowledge about the pension funds investment
of the Agency. This was supplemented by secondary data. The researcher used a mixed
approach study where the quantitative data show existing pension funds investment
practices of the agency quantitatively and the qualitative data shows the opinion of
respondents regarding pension fund investment practices at SSA and related issues. The
study result show that the attainment of unsatisfactory return on pension funds
investment, concentration of the funds on non- marketable and, short-term assets which
yield low return, and lack of standard investment practices like, lack of investment policy,
detail and exhaustive investment guideline, unable to measure performance periodically
and disclose to the public, and unable to follow the existing guideline in its investment
activities. The agency's investment activities has been influencing by implicit and explicit
government intervention specially, the invested pension funds in one way or another way
has been used as a captive source of finance for government .In addition, underdeveloped
financial market, limited expertise in the area, low market return and low understanding
about the fund from officials have been challenging the investment of pension funds in
SSA.
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Keywords
pension funds, pension funds investment, Social security Agency