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Section 53 (b) of the Public
Service Retirement Benefit Act Number 2 of 1999
prescribes one of the core functions of PSPF as
being "To invest moneys available in the
Fund". In order to carry out this function,
the Fund developed a comprehensive Investment
Management Policy as the guideline for undertaking
its various investments.
The policy aims at attaining and maintaining
a positive real rate of return on the Fund's overall
investment portfolio as well as maintaining a
well-diversified investment portfolio that is
capable of handling the Fund's short-term and
long-term obligations on a sustainable basis.
Policy objectives
- Optimize the return to the Fund consistent
with a prudent level of risk;
- Ensure that there are sufficient resources
to meet the Fund's pension
Liabilities;
- Ensure the suitability of Fund's assets in
relation to the needs of the Fund;
- The Policy aims at achieving the best possible
overall return on investment at
an acceptable level of risk.
The investment Policy of the Fund takes into
consideration the following investment guiding
principles of investing social security funds:
| Safety |
PSPF shall invest
in areas that guarantee safety of the
Fund's capital |
| Yield: |
The returns on investment
should be appreciable |
| Liquidity: |
PSPF will ensure
that sufficient resources are held in
short-term investments to enable the
Fund to meet its obligations as they
become due |
| Economic
and social utility |
It is
in the interest of the Fund to ensure
that some of the funds are invested
in such a way that they contribute to
improve the health and education conditions,
or the standard of living of the members |
| Diversifications |
Ensuring that the
portfolio mix is adjusted in the light
of changing environmental circumstance |
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Investment Portfolio
The investment Portfolio of the Fund has been
grouped into two main categories; Fixed Income
Investments and Non-Fixed Income Investments.
Basing on these categories, the Fund targets to
adopt the following asset mix and limits:
Proposed asset mix and limits for the years 2002/3
- 2004/5
| Assets |
Minimum* |
Strategic
target |
Maximum* |
| A:FIXED
INCOME |
|
|
|
| Treasury Bills |
15 |
25 |
35 |
| Treasury
Bonds |
15 |
20 |
30 |
| Fixed Deposits |
10 |
15 |
25 |
| Corporate Loans |
3 |
5 |
10 |
| Sub-total |
|
65 |
|
| B:
NON-FIXED INCOME |
|
|
|
| Equities: - |
|
|
|
|
Listed
|
5 |
10 |
20 |
| Unlisted |
2 |
8 |
10 |
| Real estate |
5 |
10 |
20 |
| Corporate Bonds
|
|
2 |
25 |
| Infrastructure** |
|
5 |
10 |
| Sub
Total |
|
35 |
|
| |
|
|
|
| Grand
Total |
|
100 |
|
|
* The sum of minimums and maximums does not equal
100% because variations from target allocations
must be offset by opposite variations
** These are newly proposed areas of investment.
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