A survey of factors influencing liquidity of occupational pension funds in Kenya

Abstract

The research involves an investigation into the factors that influence liquidity of pension funds in Kenya and challenges faced by fund managers in ensuring liquidity of the pension funds. The· information was obtained using a questionnaire administered to investment managers of the fund managers registered with Retirement Benefits Authority (RBA). Most (84%) pension funds managed by fund managers are Defined Contribution (DC) Plans because they are easy to administer and manage as they require less actuarial valuations and risk is borne by members and not the sponsor. The results identified the factors that influence liquidity of pension funds in Kenya as investment return, regulatory bodies, early retirements, actuarial assumptions among others. The biggest challenge faced by fund managers currently in Kenya was that of retrenchments/redundancies. Other challenges include inflation, unstable stock market and low yielding investments.