Effects of Pension Characteristics on Firm Value of Pension Fund Administrators in Nigeria
CHAPTER ONE
Objective of the study
The objectives of the study are
- To establish the impact of selected pension fund characteristics on the financial performance of pension funds in Nigeria.
- To determine whether a relationship exists between the Impact of the Contributory Pension Scheme on employee retirement benefits and standard of living
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Introduction
The new Contributory Pension Scheme introduced Individual Accounts called Retirement Savings Accounts (RSA) for employees and each employee is required by law to open a RSA in his name with a Pension Fund Administrator (PFA) of his choice. The financial performance of this RSA funds is what is being considered here. These RSA funds have their own separate accounts where all their transactions are treated and recorded and at the end of the accounting period, final accounts are prepared for the pension funds. After the review of the limited Information on the financial performance of pension funds, the following variables where used as the selected pension fund characteristics; Age of fund, expenditure of funds, density of contribution and the amount of idle contribution
Age of the fund
Financial performance may be attributed to the age of the pension fund i.e. how long the fund has been in existence. In this case, the Age of the pension fund is synonymous with the age of the Pension Fund Administrators managing the fund. Pension funds are expected to take a while to become profitable. This is because they deal mostly in medium to long-term investments. Tijjani (2014) in his work established that the older a Pension Fund Administrator is, the more financially sustainable it is expected to be. Although the financial performance of some funds would have declined over time due to poor management. Oluoch (2013) and Kigen (2016) used exit age as an independent variable, which influenced the financial performance of pension funds in Kenya. So we hypothesize;
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain effects of pension characteristics on firm value of pension Fund administrators in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of pension characteristics on firm value of pension Fund administrators in Nigeria
Summary
This study was on effects of pension characteristics on firm value of pension Fund administrators in Nigeria. Two objectives were raised which included; To establish the impact of selected pension fund characteristics on the financial performance of pension funds in Nigeria and to determine whether a relationship exists between the Impact of the Contributory Pension Scheme on employee retirement benefits and standard of living. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Nigeria pension scheme in Enugu. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The results also tell us that age, expenditure, contribution density and idle contributions of the fund are jointly responsible for about 97% of the changes in financial performance. The results from this research have proven that Age, Contribution Density and Idle Contributions are certainly factors to consider when assessing the performance of pension funds in Nigeria
Recommendation
The older a fund is, the better it does financially.
Funds with a smaller amount of contributions had a better financial performance
In the pension industry, a larger fund does not always mean larger returns. When choosing a pension fund administrator, the expenditure the fund does not impact the financial performance of the Pension Fund Administrator
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