Retirement schemes get lift from share price rally at NSE
Nairobi Securities Exchange trading floor. A rally in share prices has pushed up the value of retirement schemes’ funds invested at the bourse. FILE
The sustained rally in share prices at the stock market has pushed up the value of retirement schemes’ funds invested at the bourse by an average of 7.9 per cent in the first three months of the year compared to a 2.3 per cent growth in the last quarter of 2012.
A survey by financial services firm Acturial Services East Africa (Actserv) has showed that the assets of 104 sampled schemes rose to Sh62.7 billion from Sh57 billion in December.
“The overall returns were buoyed by the equity returns of 27.4 per cent up from 8.8 per cent in the last quarter of 2012. These returns out-performed the benchmark of 18.9 per cent,” said Actserv.
Total assets held by retirement schemes as at June last year crossed the half trillion shillings mark, standing at Sh522.6 billion as per figures provided by the Retirement Benefits Authority (RBA).
State retirement fund NSSF held Sh110.9 billion as per the RBA report.
The returns posted by the pension schemes out-performed the overall inflation of 2.8 per cent in the first quarter, handing positive returns to pensioners.
The Nairobi Securities Exchange 20-Share Index has risen by 19 per cent since the beginning of the year to close at 4,918.27 points on Wednesday.
The surveyors said the increase in the valuation of stocks after the price appreciation caused the funds invested in equities to rise to 31.9 per cent of total assets from 27.5 per cent at the end of the year.
The rise is crucial as it helps schemes balance the percentage holding in different portfolio, especially in real estate, which is capped at 30 per cent but had surpassed the limit owing to valuation changes.
The value of government securities held by the pension schemes is also expected to go up as interest rates go down.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
