World Summit on Management Sciences
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Accepted Abstracts

Determinants of Performance of Pension Fund Administrators (PFAs) in Nigeria

Saheed Adekunle Muraina*
Ahmadu Bello University, Nigeria

Citation: Muraina SA (2020) Determinants of Performance of Pension Fund Administrators (PFAs) in Nigeria. SciTech Management Sciences 2020. Thailand

Received: May 02, 2020         Accepted: May 06, 2020         Published: May 06, 2020

Abstract

Purpose 

The aim of this paper is to examine determinants of Performance of Pension Fund Administrators (PFAs) in Nigeria.

Design/methodology/approach

The study utilized correlational research design to investigate determinants of Performance of Pension Fund Administrators (PFAs) in Nigeria. The Feasible Generalized Least Square (FGLS) Regression Technique was employed for the analysis so as to achieve the objective of the study.

Findings  

The study found that board size and operating expenses had positively and significantly influenced performance of Pension Fund Administrators (PFAs) while exchange rate had positively but insignificantly influenced performance of Pension Fund Administrators (PFAs) in Nigeria over the study period of 2010 to 2018.

Research limitations

The study only utilized three (3) independent variables (board size, operating expenses and  exchange rate) and one dependent variable (Return on Equity) whereas other variables such Firm Size, Gross Domestic Product (GDP), Firm Age, Inflation as well as dependent variables such as Return on Assets (ROA) were not considered in this study. It is therefore recommended that future studies could include other variables not covered in this paper.

Practical implications

Sequel to the failure of defined benefits pension plan in Nigeria, contributory pension scheme was launched in 2004 through the enactment of the Pension Reform Act (2004), which empowers the National Pension Commission (PenCom) to serve as a pension regulatory body in the country and under which, pension fund administrators (PFAs) in Nigeria operate .This paper contributes to the extant literature on pension fund administrators (PFAs)’s performance. Thus, performance of pension fund administrators was found to be relevant under the defined contribution pension scheme in Nigeria.

Social implications

The performance of pension fund administrators in Nigeria has a direct significant impact on the well-being and longevity of Nigerian pensioners’ lives because PFAs’ non-performance creates a setback for pension fund assets under their administration, on which retirees’ heavily rely for their survival.

Originality/value 

To the best of the researcher’s knowledge, this is the first empirical study that sought to investigate determinants of performance of eighteen (18) Pension Fund Administrators (PFAs) in Nigeria from the period 2010 to 2018. Therefore, the positive and statistical significance of operating expenses and board size found in this paper using FGLS Regression Technique of analysis will further improve the financial integrity of the PFAs and welfare of the retirees under defined contribution pension scheme in Nigeria.

Key Words: Defined Contribution, Financial Performance, PenCom