The Relationship Between Pension Fund Assets and Economic Growth in Kenya

Abstract

The primary objective of this research work is to carry out proper investigation as regards to the “the relationship between Pension Fund Assets and Economic Growth in Kenya. The main Focus was to establish any correlation between Retirement Pension Assets, Equity Turnover, Treasury Bill, Inflation and Domestic Debt. The study analyzed the relationship between Pension Assets, Domestic Debt and GDP. It also established the relationship between Pension Assets and Stock Market Capitalization. A further analysis was done by establishing the relationship between Pension Assets and Inflation. The background to the study was discussed by looking at the Pension Industry in Developed Economies and the Emerging Market Economies as well as its evolution since the early periods. Different scholars perspectives was also looked at with regards to the contribution the Pension Industry brings to any Economy. Key terminologies used in the Pension Fund Industry were also defined as well as the statement of general problems. The statement of the problem was arrived at by carrying out a critical analysis of the previous studies in the area thereby identifying the research gap in the past studies. A comprehensive review of related literatures of different authors was made. Here, the study looked at the conceptual domain of pension, where it was defined by several scholars and its importance conferred appraisal. Secondary data was gathered through the utilization of the Retirement Benefit Authority publications, figures from KNBS, economic reports from KIPPRA, data on consumer price index from the Ministry of Finance and Planning and National Social Security Fund financial statements. The study utilized ratios and percentages to demonstrate the relationship between retirement benefits assets and economic growth. The data that was used for the purpose of this research was from the periods 2002 to 2011; it was presented and analyzed using SPSS, frequencies tables and percentages that were used to establish the relationship between the variables. The collected and organized data was classified and analyzed using the frequency tables with the help of the Statistical Package for Social Sciences (SPSS) to establish the relationship between pension fund assets and economic growth in Kenya, the percentage method was also utilized in the presentation, interpretation and analysis of data in tabular form. The qualitative data was analyzed by way of content analysis method through the use of descriptive statistical methods such as measures of central tendency and inferential statistics such as multiple regression analysis. The results of the findings showed a Positive Relationship between Retirement Pension Assets and Economic Growth in Kenya.