Overview

Investment Policy Objectives

The objective of the Investment Policy is to guide the Board of Trustees in its investment decision-making. The policy aims at maximising income from various investments ofthe Fund, protecting them, safeguarding and promoting the interests of the members of the Fund by directing investments into safe, high yielding investments and to
avert, prevent and minimise any loss to obtain an optimum rate of return which is consistent with the safety and liquidity criteria. It also aims at improving social and economic welfare of the members of the Fund and the nation as a whole.

Objectives of the Investment

Objectives of the Fund are to:

• Maintain time value of money;
• Enhance the capacity of the Fund to pay meaningful benefi ts to its members;
• Generate income to meet administrative expenditure;
• Support social and economic utility; and
• Support social and economic well-being of NSSF members.

Guiding Principles for NSSF Investments

The basic criteria governing the NSSF investments are yield, safety, liquidity, socioeconomic utility, maintenance of asset value and diversifi cation.

Safety

Safety means the certainty of recovery of the invested capital and yield thereon. NSSF invests in areas, which guarantee unlimited security for the Fund’s resources.

Yield

NSSF commits its resources into high yield investments to be able to offer meaningful benefi ts to members. That means investments undertaken by NSSF, as far as possible; provide positive rate of return, to maintain the value of members’ funds.

Liquidity

Liquidity means the ease with which an investment can be turned into cash. NSSF ensures that a certain proportion of investible funds are invested in assets which are easily convertible into cash for the purpose of meeting short-term fi nancial obligations.

Socio-economic utility

NSSF invests in areas that fulfi l conditions of economic or social utility to the country especially in areas which create employment and contribute to national economic development.

Maintenance of asset value

NSSF investments are directed to areas which ensure positive returns to maintain the value of the Fund’s assets.

Diversification

While the above are the basic principles, NSSF also takes into consideration the aspect of diversifi cation of investment for the purpose of minimising risk.

Proportion of investments funds

In each particular fi nancial year the Fund sets aside at least 75 per cent of its investible funds for investment purposes. The remaining 25% is used for benefi t payments and administrative and capital development expenditure.

Investment portfolio mix

The annual allocation of funds for different classes of assets in the investment portfolio is as follows: