Abstract

The purpose of this study was to evaluate the procedures and difficulties associated with th
e investment of pension funds in the Private Organization Employee Social Security Agency 
and the Ethiopian Social Security Agency. The key information included
data was gathered from 36 key sources with particular knowledge about
investing the Agency's pension money. Furthermore, there was secondary information.
A mixed-methods study was employed by the researchers, and
Quantitative information demonstrates current pension funds' investing strategies, includi
ngrefectingboth the quantitative and qualitative statistics from the agency demonstrate the 
opinion ofincludingefectingbothreflecting respondents' perceptions of ESSA's and POESSA's 
pension fund investing methods and associated problems.
The study's findings demonstrate how both implicit and overt government engagement has 
affected the agency's investment activities, particularly the use of the invested pension fun
d as a a dedicated source of funding for the state. Moreover, underdevelopment
financial market, a lack of industry experience, a poor market return, and low
Obtaining a clear understanding of the money from officials has proven difficult.
pension fund investments in ESSA and POESSA.

INTRODUCTION

BACKGROUND OF THE STUDY

Many people require assistance in order to live and satisfy their needs.
Particularly when they get older and lose the ability to work and earn money, residents are 
more dependent on the government.
Government, on the other hand, needs to plan a means to assist people. In
In essence, unless one adopts a libertarian perspective, the government's job is to
make sure people are not living in poverty when they are old.
The first pension fund was created in the United States in 1759 for the benefit of church pa
stors' widows and children.
The first corporate pension fund wasn't established until 1875 by the American Express Co
mpany. By
In 1940, there were only 400 pension funds, mostly for the railroad, banking, and public util
ity sectors. In addition, the sector has expanded since then.
Employees of organizations in Ethiopia contribute to pension funds.
Before releasing beneficiaries, it is important to look at how well employers are using this f
und.
But the main goal of this endeavor is to elucidate the truth about how well the pension fun
d is run by those in charge of its custodianship.
Investing wisely in pension funds can offer several benefits.
The institutional investor is given the opportunity to maintain its fund, which would increas
e the pensioners' income throughout their retirement. This is more crucial.
Additionally, it can support the growth of developing businesses in general and the financia
l sector as a whole. Pension funds can even afford to participate in start-
up businesses that are still developing their products and services (venture capital), suppor
ting expanding businesses, which is an important aspect of investing pension money.
During economic cycles, both leasing and increase of merchant banking capital companies.
Additionally, they are better situated to purchase the private equity interests of
Investors compelled to sell in a market with few available purchasers, as in Ethiopia.

Since there are no policies in Ethiopia that support the investment of the money and their 
use for pensions, it is difficult to state that this notion is widely shared among the country's 
policy makers. belief in the ability of pension funds to help the financial sector develop.
Therefore, the existing pension practices and difficulties are the main subject of this study.
ESSA and private organization employee social security fund investments
company (POESSA).

Background of the Organization

Short History of the Ethiopian Social Security Agency (ESSA)

The social security system in Ethiopia has grown gradually as a result of numerous social, e
conomic, and political reasons.
Emperor Minilik the second allocated land for war veterans, including the Adowa Battle vet
erans, in 1996. survivors of those who perished in the conflict. Despite this amazing piece
the act can be viewed as having signaled the start of a short of
Ethiopia's social security system was not without its own faults. There
Its implementation lacked uniformity, there was no statute to ensure its enforcement, and
Without a doubt, no one involved received an equal benefit because there was possibility f
or favoritism. wide open because no legal rights could be asserted.
The necessity for a pension legislation was being recognized in the 1930s with the emergen
ce of modern institutions, the development of bureaucratic machinery, as well as the expan
sion in the number of paid officials in all areas of government activities.
debated in the legislature. Ethiopia had already been invaded by fascist Italy and
All national initiatives for social and economic growth came to a halt. Right
The government made an effort to provide compensation for the wounded and
the households whose breadwinner was lost due to the distribution of land and financial ai
d annually.

As a result of this development, the public officials' pension decree No. 46/1961 (as revised 
by proclamation No. 209/1963) entered into force, laying the groundwork for the first creati
on of the Ethiopian pension system.
Initially, both the military and government employees were covered by this program.
After the Ethiopian Revolution, when they were engaged as employees in the
The plan featured government projects that were formerly owned by private parties.
The expansion of the program and other
The rise of the program was caused by the expansion of the public service sector.

1.2 Statement of the Problem

Questions

The assignment addresses the following research questions:

 What are the challenges of pension fund investment in ESSA and

POESSA?

 What are the opportunities for pension fund investment in the agencies?

 How the current regulation and administration of pension fund

investment looks like in the agencies?

 What is the effect of pension fund investment on the benefits of

pensioner?

 What is the role of pension fund investment in agencies financial

performance?

.2 Objective of the Study

General objective

The general objective of the study was to investigate the opportunities and

challenges of pension fund investment in Ethiopian context.

Specific objective

Specially, the paper was designed to:

 Investigate the challenges faced by the pension fund investment office;

 Identify the available opportunities for pension fund investment ;

 Examine the existing pension fund investment practice in Ethiopia;

 Asses how the pension fund is significant for the pensioners;

 Analyze to what extent pension fund investment influences how the

financial performance of ESSA and POESSA

1.3 Significance of the Study

The study's main goal was to evaluate the methods and difficulties involved in the investme

nt of pension funds.

It is important for both academic and policy reasons to comprehend the agencies' investm

ent strategies and all of the difficulties they face.

In other words, it probably adds to the corpus of knowledge by providing empirical evidenc

e of the procedures and difficulties involved in investing pension funds. Thus, the paper

has the following importance; it gives

information about the pension fund investment to the public;

 It shows the challenges and significance of pension fund investment;

 It notifies the benefit of pensioners from the pension fund investments;

 Address to the public how the pension will affect the economy

Data and Methodology

Data Type and Source

both primary and secondary
source of data were used:
Primary source
The primary data was obtained from semi structured interview and
questionnaire
 Interview was conducted with the staff of ESSA investment office.
 Questionnaire was distributed to the staff of ESSA investment office.
Secondary source
The secondary data was collected from “google ” and other relevant
literatures. In addition, the agency‟s report on pension fund investment
activities and statically abstracts were used as a secondary data.
Data Analysis Methods
Simple descriptive analysis was used to summarize the data, which was occasionally given i
n tabular format.
Using information from the primary sources, this involves outlining the potential and difficu
lties associated with investing in pension funds. secondary sources, too.
Additionally, comparisons to the practices of certain other nations were conducted.

Organization of the Paper

The goal of this study was to examine the opportunities and difficulties associated with pen
sion fund investment in Ethiopia. There are four chapters in the study.
The study's history, purpose, and methodology are introduced in the first chapter.
a description of the issue, the study's goals, its significance, its research methods, and its li
mitations.
The review of theoretical and empirical literature is covered in the second chapter, and dat
a analysis is covered in the third chapter.
The summary of findings, recommendations, and conclusions are presented in the final cha
pter.