scheme-level determinants of Fund performance of Registered pension Scheme in Kenya

Abstract

The performance of individual pension schemes holds immense importance in any nation's economic landscape, given their integral role. On a global scale, countries are 1increasingly 1relying on 1individual 1pension 1savings 1accounts to 1secure post- 1retirement income. Despite their existence for many years, the alignment of their performance with long-term pension objectives has often been unclear. This research had the objective of investigating the influence of various determinants at the scheme level on the 1financial 1performance of 1individual 1pension 1schemes in 1Kenya. Specifically, it delved into how factors such as member and scheme age, fund size, contribution density, operational costs, and the experience of scheme managers impact the financial outcomes of these schemes. To carry out this study, a longitudinal research design was employed, encompassing all 41 registered Kenyan individual pension schemes 1under the oversight of the 1Retirement 1Benefits 1Authority (RBA). 1Quantitative 1secondary data 1were utilized, sourced from the annual financial statements submitted by pension schemes to Fund Managers, Scheme Trustees, Scheme Administrators, and the 1RBA. 1The study focused on a ten-year timeframe spanning from 2013 to 2022 for its analysis and employed descriptive and inferential statistics using SPSS version 27. The findings of the study unveiled moderate, positive, and statistically significant correlations between Return on Assets (ROA) and attributes such as Contribution Density, Fund Size, and Managers' experience. Weaker yet still 1significant and 1positive 1correlations were identified between ROA and Fund Age. However, a strong, negative, and significant association was observed between ROA and Operating Costs.