Employer Related Determinants of Scheme Design in Occupational Defined Contribution Schemes in Kenya
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Date
2015
Authors
Wawire, Nelson W.
Ombuki, Charles
Tari, Justus
Journal Title
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Abstract
This paper aims to provide an understanding of employer related determinants of scheme design in occupational
defined contribution schemes (ODCS) in Kenya. ODCS involve no promises about the size of the benefits and
no risk to the employer. The risk of ending up with low or no benefits falls entirely on the scheme members. It is
necessary therefore, that determinants of scheme design are carefully considered in establishment and review of
defined contribution schemes to deliver adequate benefits to members. Based on modern portfolio and the life
cycle theories, the study investigated the key employer related determinants of scheme design in ODCS in Kenya.
Primary data were collected using a questionnaire administered to scheme administrators in the sample.
Descriptive statistics were used to profile respondents, describe sample characteristics and a logistic econometric
model was applied to evaluate the employer related determinants of scheme design. The study showed that the
key employer related determinants of scheme design were the employer’s budgetary constraint and recognition
of the length of service of scheme members. From the findings, it was recommended that employers should in
addition consider pensionable salary, retirement age and occupation in designing schemes. This would guarantee
members a reasonable standard of living after retirement.
Description
Journal article
Keywords
Occupational Defined Contribution Schemes, Scheme Design
Citation
European Journal of Business and Management Vol.7, No.6, 2015