Journal of Human Resources Management and Labor Studies

Analysis of Some Selected Factors Influencing Pension Funds Sustainability in Nigeria
Olusegun Adekunle W1 (PhD) ; Makinde, Abiola, O.(PhD); Adeoye, Ayodele,O. (PhD)

Abstract
The study was guided by a positivism paradigm. Quantitative data was collected by administering survey questionnaires to CPS beneficiaries from Lagos State civil service. Using a five-point Likert scale, questionnaire items measure respondents? perception of pension funds sustainability. Data were processed and analyzed using Statistical Package for Social Sciences (SPSS). Cronbach alpha scores for Likert data ranged from 0.81 to 0.88, indicating reliable internal consistency of the items to measure the research constructs. Hypotheses were tested and confirmed using Student?s T-test, Analysis of Variance (ANOVA), and multiple regression analysis (MRA). Empirical findings showed that beneficiaries have a strong perception of the CPS in Lagos State, and that most beneficiaries are optimistic that the scheme would provide income, post-retirement. Based on the results from the regression analysis, the study concluded that beneficiaries perceived that fund governance (p=0.023), operational efficiency (p<0.001), and risk management (p=0.011) have significant positive effects on pension funds sustainability in Lagos State. However, fund regulation and investment strategy neither have significant positive nor negative effects (p=0.356 and p=0.094 respectively) on funds sustainability. Pension funds beneficiaries in Lagos State do not perceive the investment strategy of the Lagos Contributory Pension Scheme as adequately convincing and satisfactory. In addition, beneficiaries are conscious of the investment strategies governing the pension scheme to avoid post retirement poverty. The pension sustainability model developed in this study clearly demonstrates the interaction of fund governance, regulation, operational efficiency, informed investment strategy, and proper risk management to predict contextual sustainability of the Nigerian Contributory Pension Scheme. Policy makers, licensed private sector organizations, and other stakeholders in pension management should critically consider best practices that can aid significant decline in the cost of pension fund administration. Furthermore, attention should be given to the swift removal of bureaucratic and undesirable practices that inhibit pension fund efficiency.

Full Text: PDF     DOI: 10.15640/jhrmls.v7n1a2