Effects Of Retirement Benefit Authority Act On Risk Of Investments Held By Pension Funds In Kenya

Abstract

The purpose of the study was to determine the effects of RBA Act 2000 on investment risk of pension funds in Kenya. The study enlightens the stakeholders in the pension industry on the risk effects arising from RBA enactment. The data was obtained from secondary sources, which included pension funds audited accounts, end of period returns and annual returns from Retirement Benefits Authority. The data was analysed using SPSS on income and distribution of assets of the pension funds portfolio. The study revealed that with application of RBA Act the asset distribution of pension funds portfolio have changed. It was established that pension funds have invested heavily in marketable and liquid assets improving liquidity of pension funds. Another interesting observation is that the earnings are more stable and less risk is observed with applications of RBA rules and regulations. The study can be used to explain the reasons for investing in certain assets of the portfolio given wide range of assets from which to invest.