Pension Fund Characteristics and Financial Performance in Nigeria

International Journal of Research and Innovation in Social Science (IJRISS) | Volume II, Issue XII, December 2018 | ISSN 2454–6186

Pension Fund Characteristics and Financial Performance in Nigeria

AJIBADE, Ayodeji Temitope1, JAYEOBA, Olajumoke Olamide2, AGHAHOWA Efe Oluwatobiloba3

1,2,3 Babcock University, Ilishan-Remo, Ogun State, Nigeria.
Corresponding Author: AJIBADE, Ayodeji Temitope

Abstract: – The objective of this study was to determine the effect of selected pension fund characteristics on the financial performance of pension funds in Nigeria. The dependent variable was financial performance measured by Unit Price while the independent variables were Age of the fund, Expenditure of the fund, Contribution Density and Idle Contributions.
The study used secondary data obtained from 11 pension fund Administrators and the National Pension Commission for a period seven years 2010 – 2016. This study made use of panel data and used multiple regression analysis to use analyze the data with the help of the Eviews9 statistical package.
The model proved to be statistically significant with a combined probability of F-statistics of 0.0000 which is below the adopted level of significance of 5%. Age of the fund was found to have a positive significant effect on financial performance of the fund with a p-value of 0.0000. Expenditure was proven to have an insignificant effect on financial performance with a p-value of 0.4819. Contribution Density was found to have a negative significant effect on financial performance with a p- value of 0.0002. Idle Contributions where proven to have a significant positive effect on the financial performance of pension funds with a p-value of 0.0131.
It was concluded that age, contribution density and idle contributions had significant effects on financial performance measured by unit price while expenditure did not have a significant effect on financial performance of pension funds in Nigeria. The study recommends that older pension funds, pension funds that manages smaller contributions and pension funds with ample idle contributions share are more likely to have better financial performance in Nigeria.

Keywords: Pension, pension funds, Pension Fund Administrators (PFAs), Contribution density, idle contributions.

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