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Pension schemes are embracing emerging investment avenues for members’ savings that guarantee higher returns than the traditional ones, while also contributing to the socio-economic development amid public debt strain that some countries are facing.
Speakers at the just concluded International Social Security Association (ISSA) continental technical seminar in Nairobi, highlighted how investment in infrastructure projects is a game changer for pension schemes, noting that African countries are increasingly facing challenges attracting funding from multilateral lenders who are tightening conditions for credit.
In Kenya, the government has increasingly been pushing for Public Private Partnership model to finance infrastructure projects to reduce reliance on donor funding or overburdening taxpayers to fund the capital-intensive projects.
It is in line with this, that the National Social Security Fund (NSSF) has expressed interest in investing in the 175-kilometre Nairobi-Nakuru-Mau Summit Highway, which is currently at the tendering stage.
NSSF believes the Nairobi-Nakuru-Mau Summit Highway is a secure way of investing pension funds since the toll road will earn pensioners a handsome return.
NSSF Managing Trustee David Koros says the proposal to invest in infrastructure is as a result of benchmarking that the parastatal has undertaken.
Koros says public pension schemes in other countries are increasingly embracing alternative investment avenues such as infrastructure, agriculture, and health.
He says this is part of ways that NSSF is employing to double the Fund’s portfolio from the current Ksh 500 billion to Ksh 1 trillion in the medium term.
Koros says NSSF is accelerating reforms at the public pension body.
“We have streamlined the waiting time for processing payments for pensioners from the previous average of 76 days to the current 10 days. We are working on further reducing the turnaround time to a day,” said Koros.
