Performance Sustainability Strategy of Pension Fund Managers in the Emerging Market

Abstract

This study examines the sustainability of pension fund managers in emerging economy, specifically focusing on data from Nigeria's National Pension Commission. A mixed-methods approach is utilized, combining secondary data analysis with primary data collected through a survey questionnaire distributed to stakeholders within the pension industry. Descriptive statistics and an Independent Samples T-Test are used to analyze the data, and ARDL regression is employed to test the research hypotheses. The findings indicate that higher costs in areas unrelated to pensions result in lower benefit payouts in both the short and long term. Additionally, administrative costs incurred by pension fund managers have a positive and statistically significant relationship with benefits paid. Several factors, including investments in federal government securities, total contributions to pension funds, and inflation, contribute to increased investment income. The survey responses from industry stakeholders highlight various obstacles that hinder the long-term sustainability of pension fund managers' performance. These barriers include insufficient skills, a lack of innovation, and inadequate processes. However, the respondents also recognize the importance of good governance, operational efficiency, and effective planning and management in sustaining the performance of pension funds. Based on the findings, the study recommends that pension fund managers diversify their investment portfolios by including federal bonds and other securities. Furthermore, they should focus on developing skills, improving processes, and fostering innovative solutions to overcome the barriers to performance.