The effects of corporate governance practices on the growth of pension schemes in Kenya
Pension funds are the principal sources of retirement income for millions of people in the world. Pension schemes contribute significantly to the reduction in old-age poverty since a large proportion of the incomes of retirees is derived from their previous pension arrangements. In addition, retirement income accounts for 68% of the total income of retirees in Kenya hence an important contributor to the gross domestic product (GDP) of country. However, the pension schemes in Kenya have been characterized by' rampant mismanagement and misappropriation of funds that have led to underperformance. In addition, the effectiveness of the application of the corporate governance practices have been blamed for failure of many pension schemes to meet their financial obligations and overall mismanagement of the schemes. In addition, most pension schemes in Kenya are grossly under-funded and this has a negative effect on their growth. This study sought to assess the effects of corporate governance practices on the growth of pension schemes in Kenya. The study design was descriptive research design, The target population included all the 1216 Pensions Schemes registered by Retirement Benefits Authority (RBA) in Kenya. Systematic random sampling method was used to draw a sample of 122 respondents (which represents 10% of the target population) from the Pensions Schemes registered by RBA. Semi- structured questionnaires was administered to the respondents. The data was analyzed by generating descriptive statistics such as percentages, frequencies, means and standard deviation. In addition, inferential statistics were also utilized. Key inferential statistics utilized was Pearson correlation analysis. This was used to establish the relation between the dependent and the independent variables of study. Statistical Package for Social Sciences (SPSS) aided in the statistical analysis of quantitative data. Data was presented using tables, charts and bar graphs. The findings showed that the members of the pension schemes receive inaccurate information which led to inappropriate decisions, late payment of contributions was also evident which led to delay or inaccuracies in payment of benefits. In addition, the existing IT system was found to be insufficient to handle the financial transactions effectively. This study recommends that the pension schemes invest in an efficient financial management systems that will effectively safeguard the members' contribution. In addition, the management needs to put in place a good and efficient IT system that is sufficient to handle all the financial transactions effectively.