The Effect Of Fund Characteristics On Financial Performance Of Pension Schemes In Kenya

Abstract

The successful performance of pension schemes is important to all the stakeholders based on the role they play in the economy. They are also development rapidly not only in Kenya but also across the public. Sustainability and growth of pension schemes is key as pensions schemes are expected to support the economy, create employment, and support the beneficiaries upon retirement. It is therefore imperative to understand how the age of operations of a pension schemes impacts on performance. The study sought to understand this by addressing the study objective of the effect of fund characteristics on financial performance of pension schemes in Kenya through the variables age of the fund, expenditure of the fund, idle funds and density of contributions. The study adopted a descriptive correlational research design quantitatively. The population of the study was 1232 registered pension schemes under RBA (RBA, 2018). The sampling design was stratified convenience sampling in the choice of the 34 schemes. Data was collected from the financial statements of 29 companies from 2014 to 2018. The study findings indicated that the age of the fund has a negative but not significant influence on the performance of pension schemes, density of contributions and expenditure were found to have a positive insignificant influence on performance and idle funds have a positive significant influence on the performance pension schemes. The study recommends further study on pension schemes to explore other variables that could significantly influence performance.