Corporate Governance Mechanisms, Investment Policy and Financial Sustainability of Pension Fund Administrators in Nigeria
Year: 2024
Type: article
Abstract: The pension sector plays a crucial role in ensuring the well-being and financial stability of retirees.Simultaneously, the capacity of pension fund administrators to uphold their financial stability hasemerged as a significant global issue. Consequently, this research scrutinized the factors(specifically, corporate governance mechanisms and investment policy) influencing the financialsustainability of Nigerian pension fund administrators. Primary data was gathered through a selfadministeredquestionnaire following a cross-sectional research design. The study encompassed the19 pension fund administrators in Nigeria, with a purposively selected sample size of 228. Dataanalysis was conducted using the PLS-SEM technique. The results revealed that corporategovernance mechanisms (β = 0.187, t = 1.046, p = 0.154) and investment policy (β=0.367; t=2.598;and p=0.240) exhibit negligible impacts on the financial sustainability of pension fund managers inNigeria at 5% level of significance. Consequently, it can be inferred that corporate governancemechanisms and investment policy do not exert a significant influence on the financial sustainabilityof authorized pension fund administrators in Nigeria. The study recommended that pension fundadministrators in Nigeria should regularly assess and update corporate governance procedures toalign with industry best practices, implement robust oversight mechanisms to ensure transparencyand accountability in decision-making processes, and enhance board training and development toimprove the effectiveness of governance structures; and periodically review the investment policy toadapt to changing market conditions and emerging risks, diversify investment portfolios to spreadrisk and enhance potential returns, and utilize advanced risk management tools to identify andmitigate potential investment risks.
Authors: Adeoye Amuda Afolabi, Mubaraq Sanni, Muritala Olatunji Oladele, Yusuf Alabi Olumoh, Muhammed Kamaldeen Usman
Institution: Kwara State University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7055721983
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