RISK MANAGEMENT AND PENSION FUND RETURNS: DOES PENSION FUND ADMINISTRATOR OWNWERSHIP TYPE MATTER?
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Date
2022
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Department of Finance, University of Ilorin
Abstract
Pension fund returns form an integral component of defined contribution pension plan benefits.
However, low and volatile real return profiles of pension funds have been sources of growing
concern due to failure to generate generate adequate returns. This study examined risk
management impact on pension fund returns as perceived by pension fund administrators of the
Nigerian contributory pension scheme. The study further assessed the interaction effect of PFAs
type (open and closed) on the risk management impact on pension fund returns. Data was
collected through the administration of survey questionnaires on 197 managers and assistant managers of all the 24 pension fund admistrators. Based on the analyses of survey responses from
the survey of managers and assistant-managers of PFAs, results from Ordinary Least Square
(OLS) regression and Hayes Macro show a positive and significant impact of risk management on
the pension funds returns of contributory pension scheme in Nigeria. The results further confirm a
significant interaction effect of PFAs types on the impact with closed PFA reporting a stronger
relationship between risk management and pension funds returns of contributory pension scheme
in Nigeria. The study recomemended that open PFAs intensified their risk management practices
in the interest of the employees whom they manage their pension assets