Investigating pension choice factors among the faculty of public sector universities in Pakistan

Abstract

PurposeThis research designed, optimized and tested a context-specific scale to evaluate public sector employees' pension choices.Design/methodology/approachThe authors developed the scale using a comprehensive process of interviews and focus groups with experts across academia and finance. The authors used the refined scale to collect data from 564 faculty members in public sector universities following a multistage systematic cluster sampling technique. The findings revealed diversity in choice across different socio-economic and demographic variables.FindingsThe results revealed that items related to the defined benefit pension system explain most of the data variance and are preferred widely. This is followed by a preference for monetizing pension benefits and a defined contribution system. These findings indicated the need for flexible pension plans.Practical implicationsTherefore, the progressive movement towards monetization and the shift from defined benefit to a defined contribution pension system due to economic pressures must be accurately calculated and introduced where it is suitable.Originality/valueAlthough the theory of introducing a defined contribution pension system and monetization system is appealing, its practical implementation may not be encouraging for all employees.