Immovable Properties and Financial Performance of Pension Funds in Kenya
DOI:
https://doi.org/10.47604/ijfa.3745Keywords:
Immovable Properties, Financial Performance, Pension Funds, KenyaAbstract
Purpose: The financial performance of pension funds is critical for ensuring their sustainability and ability to provide adequate benefits to retirees. In Kenya, pension funds play a major role in facilitating economic growth and financial security. However, there is still an existence of low returns for some of these funds. The study aimed to establish the effect of immovable properties on the financial performance of pension funds in Kenya. This study was guided by modern portfolio theory (MPT).
Methodology: A descriptive research design was adopted for this study. The target population for this research was 10 pension fund providers in Kenya. Secondary data was utilized for this study. A secondary data collection sheet was used to collect the data. Descriptive statistics such as mean, variance, and standard deviation, and frequency distribution tables were used to analyze data. Inferential statistics used correlation and regression analysis. The study employed a panel regression model.
Findings: The trend analysis (2016–2024) shows volatile immovable property returns, peaking at 9.6% in 2020 but declining to 0.4% in 2024. Overall financial performance improved from 1.00% to 1.17%. Financial performance is highly correlated with immovable properties (r = 0.723, p < 0.01. The immovable properties significantly enhance pension fund performance.
Unique Contribution to Theory, Practice and Policy: Pension fund trustees, managers, and the RBA should enhance diversification by strategically increasing real estate. Emphasis should be placed on quality assets, robust risk management, liability matching, and currency hedging. The RBA should strengthen regulatory guidelines, monitoring, and transparency to safeguard members’ retirement savings.
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Copyright (c) 2026 Chepngeno, J , Kimani E. M, Matanda, J
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