AGM

State-run pension scheme grows surplus by five fold

Delayed release was due to lack of a board at the corruption riddled fund.

In Summary

• Net asset base grew from Sh174.09 billion to Sh196 billion, a 14 per cent growth.

• The fund declared a seven per cent interest rate for the year ending June 2017 on member contributions.

NSSF board chair General Julius Karangi
NSSF board chair General Julius Karangi
Image: FILE

The National Social Security Fund reported a surplus of Sh23.89 billion during the 2016/17 financial year compared to sh5.27 billion at the end of June 2016.

The pension fund released its 2016/17 results at its annual general meeting held in Nairobi yesterday.

According to the board chair Julius Karangi, the delayed release was due to the lack of a board at the corruption riddled fund.

He attributed the growth in surplus to increased collection of members contributions, prudent investments and operational efficiency.

“These attributes are some of our value propositions in the entire pensions industry in this country,” he said.

The fund’s net asset base grew from Sh174.09 billion to Sh196 billion, a 14 per cent growth.

The total value of NSE shares increased to Sh16.36 billion in May 2017 compared to Sh11.41 billion in April.

“These changes had a direct impact on the fund’s substantial investment in quoted equity of Sh53.6 billion even though there was an increase of Sh3.67 billion during the year from sh49.9 billion in 2015/16,”

The fund’s investment in government bonds was Sh64.15 billion compared to Sh52.74 billion the preceding financial year. Investment in corporate bonds increased marginally to Sh9.22 billion from Sh9 billion in the 2015/16 financial year.

Karangi assured investors that the board of trustees was in the process of reviewing the sale of National Bank to KCB Group. The fund is NBK’s largest shareholder controlling 48.05 per cent of the lenders ordinary shares and 20.7 per cent preference shares

 

“The bank has been underperforming over the last few years in comparison to other institutions and hence declaring no return to investors,” he said. “The ongoing discussions between NBK and KCB provides an opportunity for the fund to exit NBK and maximise returns to members through KCB.”

The state-run pension scheme declared a seven per cent interest rate for the year ending June 2017 on member contributions.

“We want to assure shareholders that the board of trustees is reviewing the offer so that the interest of members is taken care of,” he said.