Alexander Forbes Retirement Fund has reported a strong return for its contributors in 2015 despite a difficult market for investors.
Addressing members during its 8th annual general meeting, Alexander Forbes Retirement Fund Board of Trustees chairperson Lucy Kambuni said the fund, which now has over Ksh17.5 billion in assets under management, delivered a good return despite the poor performance at the stock and fixed income securities that resulted in low returns for most retail and institutional investors in 2015.
“It was a challenging year for the equities market that saw a record 14 companies that are listed in the Nairobi Securities Exchange (NSE) issue profit warnings. At the same time the volatility in the interest rates towards the end of the year made investing in fixed income difficult,” Ms Kambuni added.
She said the fund will keep investing in projects that benefit members through innovation and the real estate sector, which has continuously posted positive returns over the long term.
“We are in the processing of putting up a commercial development in the Westlands area of Nairobi as we continue to devise various strategies that will benefit members on a long term plan,” she added.
As part of innovation, the fund has initiated income draw-down investment plan, which offers members flexibility in how they utilise retirement benefits. Under this plan, members can draw down up to 15 percent o their accumulated fund for every year for their use. “By keeping their retirement fund invested, albeit conservatively, the member’s accumulated income has a chance of keeping pace with inflation over the long term,” she added.
The fund has also launched a post retirement medical plan within to enable aged people access good quality medical care, the plan enables members to save whilst working to create a pot that will fund medical care during retirement. In addition, the fund has also unveiled a new commercial development dubbed 1424 worth Ksh2.5bn Grade A office that, on completion will have a total build area of approximately 20,000m2 with 449 parking slots in 4 basements.
Mr James Olubayi, Executive Director, said the fund will continue to look for strategic partners that will bring value for members, noting that the new investment will generate consistent returns for contributors while at the same time minimising investment risks. “1424 will generate superior rents as it targets high quality tenants. Our contributors will additionally earn returns through capital appreciation of the property,” Mr Olubayi added.
The Divisional Head of Umbrella & Retail Solutions at Alexander Forbes, Ms Angela Okinda noted that the launch of the facility was a great landmark as it will enhance more growth for the fund. Since its establishment in 2005, the fund has registered strong growth in terms of both assets and members and it is now the largest multi-employer retirement Fund in East Africa, with over KSh16 billion in assets for over 150 organizations and 30,000 members.
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