Abstract
The research study evaluated pension fund management of Ethiopian social security agency. To attain these objectives, eleven years’ financial statements were used as a secondary data and different ratio analysis was carried out to examine the status of fund management of Ethiopian social security agency. Those ratios shows that the organization current assets is very much large when compared with its current liabilities which shows the organization is in the best position to pay off all of its current liability. Again, the finding displays the asset turnover has been decreasing from time to time which shows under utilization of companies asset. In addition to this, large percentage of the asset of social security is financed by equity and small percentage is financed by debt. Lastly, the analysis puts that the organization is absorbent up to 50% of its income. That means up to 50% of them is consumed by its expenses.
Highlights
A huge increase in life expectancy is one of the great achievements of the human race over the past two centuries (Truell, 2011)
During this time the dependents will face harsh living conditions since their means of survival has come to an end. This problem brings the origin of social security (Jon, 2003). It is with this purpose that Ethiopian social security agency was established in 1963(Pubic Service Pension, Proclamation N. 209/1963)
When we examine the structure of the labor force in Ethiopia, the majority of the employed population works for either the informal sector, the private sector or is self-employed (Asaminew,2010).These employees fail to have access to pension services and are vulnerable for income instability especially in their old age
Summary
A huge increase in life expectancy is one of the great achievements of the human race over the past two centuries (Truell, 2011). During this time the dependents will face harsh living conditions since their means of survival has come to an end This problem brings the origin of social security (Jon, 2003). In performing financial intermediation function of asset transformation, pensions funds are generally intended to fulfill and provide the public with two primary functions: to furnish a saving mechanism and to alleviate poverty among old through provision of income payments on retirement so as to make consumption flow smooth. From this argument we can say pension is a major element in reducing risk for the working poor
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