DETERMINANTS OF FINANCIAL PERFORMANCE OF INDIVIDUAL PENSION SCHEMES IN KENYA
Abstract
The study focused on determining the influence of RBA regulations, investment strategies, firm characteristics and fund ethics on the financial performance of the individual pension schemes. The target population for this study was all the 34 registered individual pension schemes in Kenya (RBA Directory, 2018). The study used primary data and employed closed ended questionnaires as the main research instruments. A regression model was used to establish the relationship between the study variables. A multiple linear regression model was used to test the significance of the determinants of financial performance on Individual pension schemes in Kenya. This formed the basis for the discussion, findings and recommendations of the study. The findings of the study concluded that all the four variables had a significant effect on the financial performance. In order of ranking; investment strategies had the greatest influence on the financial performance of individual retirement benefit schemes followed by of fund ethics, firm characteristics and the lowest RBA regulations. It was evident from the findings of this study that individual retirement pension schemes in Kenya had not been operating at optimum. Therefore, a lot more needed to be done both in policy and regulatory frameworks, if these organizations were to attain financial sustainability. The study concluded that the method of risk diversification should be in line with the company investment policy. This would help in ensuring the investment strategy of the company is adhered to and subsequently improving the financial performance of the individual pension schemes in the country.
Keywords: Fund Regulations, Investment Strategy, Firm Characteristics, Fund Ethics, Pension Schemes
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DOI: http://dx.doi.org/10.61426/sjbcm.v5i4.920
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