Abstract:
This paper studies efficiency of the largest publicly-managed pension funds in Tanzania and also analyses
governance issues in terms of compliance with investment policies. The study used primary and secondary data
with a comparative case study orientation. Results indicate that the two pension funds significantly do not
comply with their own asset allocation and investment policies and their portfolios of assets are heavily biased
towards government securities and real estates. Results also show that levels of administration costs for the funds
were significantly high in comparison with international benchmarks. Profitability as measured by return on
assets is not significantly different when the two funds are compared to each other but they are significantly
lower than international benchmark. Nevertheless, PPF has recorded a higher return on assets although its returns
are more volatile and therefore riskier. NSSF on the other hand earned a much less return on assets but with a
better diversified and therefore more prudent investment portfolio.
