The effects of corporate governance practices on the growth of pension schemes in Kenya
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Date
2014-07-16
Authors
keyo, Lameck 0
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Abstract
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.
Description
Department of Business Administration, 36p. 2013