ABSTRACT
The purpose of this study is to investigate the factors that affect the growth of pension funds. The study is guided by three specific objectives: To determine the effect of Density of contribution and expenditure of fund on the growth of pension funds; To establish the effect of interest rates on the growth of pension fund and to find out the effect of inflation on the growth of pension fund assets in Ethiopia. The study used descriptive research design and secondary data for the ten years starting with 2013 to 2022. Data regarding all the study was obtained from the Public servant’s Social Security Agency Chiro Brach, West Hararghe Zone Finance Office, revenue authority and autonomous enterprises and Commercial Bank of Ethiopia.
The study used descriptive statistics to determine the distribution while the regression analysis was adopted in the data analysis to determine the relationship between growth in size of contribution and expenditure of fund, interest rates and inflation on growth of pension fund assets. The study established that uncollected contribution and interest rates have a positive and influence on the growth of Pension Fund. Since this study found that inflation and pension fund assets have an inverse relationship, an inter-country study of the factors that keep inflation low in different countries should be carried out, with a thorough assessment of those countries’ fiscal policy. Interest rates volatility was found to negatively affect pension fund assets.
