Determinants of Pension Schemes Governance Effectiveness: A Case of Kenya Medical Research Institute (KEMRI)

Abstract

Retirement Funds Industry plays an important role in boosting economic growth and accelerating domestic savings in many countries. In Kenya, the retirement regulation body compliance based supervision in regulating the Pension industry. Despite this effort, there is a growing concern that some Schemes still experience serious credibility problems due to poor governance. This study sought to assess the determinants of effective pension schemes governance in Kenyan: A survey of KEMRI pension scheme was conducted where a sample of 50 respondents out of the population of 502 employees of the organization using purposive sampling technique. The study established that knowledge of the trustee‟s covenants by the members, information flow to members and participation of members in the governance of pension schemes are the main factors that influence effectiveness of governance of pension schemes. The KEMRI Pension Scheme Trustees‟ governance score card on their covenants was below average with 65.4% respondents giving it a poor rating. The study recommends that Trustees should establish a formal governance policy for decision making; enhancing information flow to members; and undertake an assessment of the skills and knowledge of Trustee. Keywords: Pension schemes, KEMRI