| dc.description.abstract | The accumulation of physical capital has long been linked to growth by various theories of
Growth and development. In his well-established empirical fact (Kuznets, 1973), draws
strong association between investment ratios and long term growth. This study analysed the
impact of pension savings scheme on Kenya’s investment growth. The pension sector in
Kenya is estimated to hold assets in excess of Ksh 700 billion or 16 per cent of gross
domestic product.
Using time series analysis for a period between 2001- 2014, the study findings show that
investments in Kenya are highly responsive to pension scheme funds. Holding other factors
constant, a one dollar change in pension funds increases investments by 128,619.7 dollars.
This implies that pension funds shock the economy positively.
From these findings and with a scope for further development in the sector, prudent
investment of these funds with enabling policies will be catalytic in enhancing Kenya’s
economic growth as only 15 per cent of the labor sector is currently covered by the formal
retirement benefits sector. With proper policies in place, the sector can help in deepening of
capital markets, long term capital formation and the development of financial markets.
Sensitisation programmes of the public on the importance of participating in the pension
scheme and ensuring wide sector coverage to include informal sector need to be implemented
by the retirement benefits authority. | en_US |
