Influence of strategic planning practices on the performance of Large Pension Schemes in Kenya

Abstract

The essence of strategy is to attempt to relate the organization to the changes in the environment (Ansoff, 2010). For any organization, strategy helps in interrogating the long term plans and ensuring that there is harmony between the vision, mission, objectives, core values, activities and its environment. Despite the pension industry in Kenya being a key a driver of the economy, there has been lack of extensive research; innovation and commercialization as it ought to besides lagging behind in terms of current technology both in operational level and in communication to the membership. The study pursued the following objectives; To establish the influence strategic planning practices on the performance of pension large schemes in Kenya and to determine the challenges of strategic planning of large Pension Schemes in Kenya. The findings of this study would be useful to the management of Pension Schemes in Kenya as it will provide significant information on determinants of strategic plans. Therefore, the study would provide the basis for the management to formulate strategies to enable successful strategic plans. This study took on a descriptive survey research design. A descriptive survey attempts to describe or define a subject often by creating a profile of a group of problems, people or events through the collection of data and tabulation of the frequencies on research variables or their interaction as indicated by Cooper and Schindler (2012). The study used both primary and secondary data sources. Primary data was obtained from the selected respondents of the research project while secondary data already exists, data intended for other purposes other than the study itself (Mugenda and Mugenda, 2003). The study employed both descriptive and content analysis. The relationship between the dependent variable and the independent variables was determined by regression model. Variables data were analyzed using Statistical Package for Social Sciences (SPSS version 22). A multiple regression model was used to determine the effectiveness of strategy plan of Pension Schemes in Kenya. The study had a response rate of 73.3% which was considered adequate for statistical reporting. The study found that majority of the respondents was Schemes that had undertaken strategic planning with knowledge on impact of strategic planning practices on performance of large pension schemes. On Strategic Choice as a strategic planning exercise, the study found that the Scheme’s had a clearly defined roadmap for growth and realizing their vision in the long term. The study recommends that the Trustees of large pension schemes need to have sound knowledge, processes and structures in place to meet the stringent legal and fiduciary requirements governing retirement benefits and in line with best practice. The study also recommends that saving for retirement should be made more attractive through good financial performance in pension schemes, good service delivery and advocacy from all sector players. Further the study recommends that the formal and informal sector has not been adequately sensitized, hence the need to develop a strategy to help in increasing coverage in this market segment. The Findings of the study showed that there are challenges of strategic planning implementation of strategic plan. This study therefore recommends that more research needs to be carried out in other services companies to show the various challenges faced and the various measures put to overcome challenges of Strategic Planning