Firm Attributes and Value of Pension Fund Administrators in Nigeria

Abstract

Value creation is a key objective of every firm and this is applicable to Pension Fund Administrators (PFAs) who seek to remain competitive and achieve superior corporate performance by taking advantage of certain firm attributes. Studies have shown that value of PFAs can impact the financial health of a significant number of individuals during their retirement years if their Retirement Saving Account (RSA) funds are well managed. This objective is scarcely achieved following the increasing challenge faced by the pension fund industry in the dimensions of dearth of investment, poor investment decision by PFAs, restrictions and investment limits by the regulator and the hunt for yield for its RSA contributors amid an environment of low interest rates. Studies that examined the combined effect of firm attributes of firm age, size, contribution density, number of contributors, board size, board quality and branch network on the value of PFAs are lean. This study investigated the effect of firm attributes on Value of Pension Fund Administrators (net asset value per unit) in Nigeria. The study employed <i>ex-post facto</i> research design. Purposive sampling technique was used to select a sample of fifteen (15) from 22 pension fund administrators which have been in existence for the past ten years (2011-2020). Data for this study were extracted from the published annual reports and accounts of the sampled companies which were validated by certification of external auditors and National Pension Commission (PenCom). Data were analysed using descriptive and inferential (multiple regression) statistics at α = 0.05 level of significance. The study found that firm attributes jointly exerted significant impact on net asset value per unit of pension fund administrators (<i>Adj</i>.R² = 0.9298, F(6, 143) = 254.96, p < 0.05). The study concluded that firm attributes enhanced the value of pension fund administrators in Nigeria. It was recommended that pension fund managers should make stakeholders’ interest (contributors and shareholders) a priority and use the selected firm attributes to their advantage to drive performance and create value.