Factors influencing access to pension schemes fund in Kenya: a case of national social security fund- Kisumu branch

Abstract

In the recent past, many countries around the globe have experienced rapid establishment and growth of pension funds. This is one of the developments that countries have given considerable attention because of the sensitivity of the transactions involved in pension funds. A global pension crisis has however emerged in the past two years owing to depressed financial markets. From this perspective, the study sought to investigate factors influencing access to pension schemes funds in NSSF in Kisumu Branch. The objectives of the study were: To establish how government policy influence access to pension schemes fund in NSSF, examine how pension awareness influence access to pension schemes fund in NSSF, assess how socio-economic factors influence access to pension schemes fund in NSSF and establish the extent to which product innovation influence access to pension schemes fund in NSSF in Kisumu Branch, Kenya. The study used a descriptive research design with a target population of 135 staff and customers from NSSF. A sample of 111 was obtained using Krejcie & Morgan (1970) verification Table. Data was collected using questionnaires and then analyzed descriptively. Results show that under Government policy, compulsory fund had significant influence on access to pensions, while pensions schemes coverage and prefunding of pensions had no bearing on pension’s access due to interference from Legislature (Parliament – preservation rule). The pension awareness had significant influence on access to pension schemes fund in NSSF through planning, retirement financial education and public education campaign. The study also shows that institutional factors, employee age and mobility and labour markets are significant influence on pension access, affordability, benefits adequacy and customer compliance at NSSF. The results also show that product innovation significantly contributed to access to pension schemes fund through pension scheme design, investment portfolios and compensation package. The NSSF provident fund is seen as affordable, affordable and adequate to its target population. The study recommends that the Legislature (Parliament – preservation rule) should demystifying the pension subject in regulating the pensions targeting the all the Kenyan people, NSSF should increase pension’s awareness in targeting: Informal sector, youth segments, members, trustees, women and PLWDs, public, media regular and timely communication to employees the policy and procedure on benefits and eliminate negative perception towards retirement. NSSF management should improve on risk management policies that safeguard the replacement rate, investment safety and time-based risks such as inflation and realign new financial product and market designs to improve pension fund access and investments. The findings of this study are significant contribution to the non-existing literature on access to pension funds. It is also significant as pension funds are the principal sources of retirement income for millions of people in the world and contribute to the GDPs of countries with significant source of capital in financial market