Determinants of Pension Governance: A Survey of Pension Plans in Kenya

Abstract

Pension governance is acknowledged as a vital characteristic of a proficient private pension system as it determines the investment performance, operational efficiency and the security of pension benefits. Empirical literature shows that despite the legal and industry inventiveness, pension governance lapses continue across countries. This paper investigates the determinants of pension plan governance in Kenya and recommends measures that can strengthen it. The sample consists of 362 pension plans in Kenya. Statistical tests are conducted by use of Pearson correlations, regressions, Scheffé tests and Analyses of variance (ANOVA) to determine the effect that pension regulations, pension plan design, membership age, number of members in the pension plan and plan leadership, have on pension governance. Empirical results show that pension governance is influenced by pension regulations, leadership, and membership age. The pension plan design and number of members do not have significant influence on how the pension plans are governed. [PUBLICATION ABSTRACT]