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
Publisher
University of Nairobi