A Dissertation Submitted in Partial Fulfillment of the Requirement for the
Award of Degree of Master of Science in Economics Project Planning and
Management (Msc. Eco. PPM) of Mzumbe University
2013
ABSTRACT
This paper examines the determinants of the growth of investment income of
pensions fund schemes. Local Authorities Pensions Fund was taken as a case study.
Time series data were used and ordinary least square method was used to estimate the
model. Results show that; the variables “members’ contributions” and “investment
made in fixed deposits” are positively related to the growth of investment income and
are statistically significant at one percent level. However, the variable “investment in
government securities,” is positively related to the growth of investment income and
statistically significant at five percent level. The estimated parameters for investment
in government securities is 1234.84 while for members contribution is 0.22 and that
of investment made in fixed deposits is 0.12. All these estimated parameters refer to
the magnitude of change of investment income when the respective variable changes
by one unit. Lastly, it is recommend that, the LAPF pensions fund should maintain
the same share of investment in government securities. This is because investment in
this area is considered to be the safest. It is also recommended to increase investible
funds in fixed deposits because the results showed that the variable is positively
related and significant to the growth of investment income. On other side, it is
recommended that; more effort should be made to increase membership base of the
Fund. This is due to the fact that, the variable “members’ contributions” has shown to
affect positively and significantly related to the growth of investment income of
LAPF pension fund in Dodoma