Firm lauded for helping to grow local pension sector

A global retirement funds management firm has been praised for enhancing the growth of the pension industry in Kenya.

Nairobi Securities Exchange Chief Executive Officer, Geoffrey Odundo said Alexander Forbes has seen the pension sector grow in line with the global trends while contributing greatly to the economy.

“The industry has grown over the last decade from an asset base of approximately Sh150 billion in December 2002 to Sh700 billion as at December 2013. This was equivalent to 14 per cent of Gross Domestic Product in 2013,” Mr Odundo said.

INNOVATIVE PRODUCTS

He said over the past 15 years since the Retirement Benefits Authority became operational, pension funds have continued to stimulate growth in the capital markets by generating demand for long-term financial assets leading to increased investment in traditional securities like equities and bonds

Pension funds have also spurred innovation of new products such as Real Estate Investment Trust, Exchange-traded Funds and asset-backed securities.

He said pension schemes spur expansion of capital markets through prudent and professional investment of funds.

About 60 per cent of total pension industry assets in Kenya are currently invested in listed securities with a vast majority placed in government securities.

The NSE boss called on pension managers to wisely invest in the new products that the NSE is bringing to the market. 

He challenged fund members to demand Shariah-compliant investment vehicles from the capital markets for Muslim contributors.