An evaluation of the investment policies of the pension fund in Ghana: a case of the SSNIT Pension Scheme
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Date
2008-08-17
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Abstract
There has been widespread public concern and perception about the inadequacy of the defined benefits provided by Pension Scheme to pensioners in Ghana. The Pension Scheme in Ghana is committed to providing income replacement for Ghanaian workers and their dependents in the event of stoppage or loss of income resulting from old age, invalidity or death. To be able to payout guaranteed pension benefits as a form of Social Insurance, there must be prudent investment of surplus funds in order to achieve such a feat.
In this study, thorough analyses are made on the performance of the investment activities of the portfolio and asset classes of the SSNIT Pension Fund. The Portfolio Nominal and Real Rate of Returns (1997-2006) are analyzed as well as that of the Asset Classes. The assessment of the level of riskiness of the performance of the Fund is based on the Standard Deviation, Coefficient of Variation as well as the Sharpe Ratio of the Portfolio and the Asset Classes over the period under study. An examination of the relationship between the Proportion of Return on Investment and Proportion of Investment Balances of Portfolio and the Asset Classes are also conducted. An analysis of the goodness of fit test (represented by R-square) is conducted on the Portfolio and Asset Classes between Investment Returns and Investment Balances in order to ascertain the extent to which Return on Investment determines the allocation of Investment Balances.
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A Dissertation presented to the KNUST School of Business,in partial fulfilment of the requirement for the award of the Master of Business Administration Degree