Pension Fund Administrators Research Articles

Blockholder voting power and investment decisions: Evidence from cross-border deals in Latin America

This paper examines the relationship between blockholder coalitions and the probability of completing a cross-border merger and acquisition. Using different power indices based on Shapley-Shubik values for cooperative games for a sample of acquirers' firms from Latin America, our findings indicate an inverted-U-shaped relationship between the voting power of the largest blockholder and the likelihood of completing a cross-border deal. This relationship is strengthened by the number of active blockholders and the participation of institutional investors within coalitions among the top four blockholders, particularly pension fund administrators. Consequently, we observe that colluding blockholders in acquirer firms are more inclined to pursue risky cross-border acquisitions, but only when they possess relatively low levels of voting rights. Additionally, the study highlights a positive moderating effect of cross-border deals with coalition agreements on the long-term value performance of acquiring firms, suggesting that coalition agreements promote overseas acquisitions that enhance value.

Performance of active portfolio managers when the benchmark is not observable

We present a specialized methodology designed for evaluating the performance of active portfolio managers in situations where the common benchmark portfolio cannot be directly observed or determined by the analyzing agent. This method assesses performance by examining the excess alpha of an optimal active fund with respect to a combination of such funds that efficiently minimizes residual risk. After establishing the theoretical underpinnings of this approach and deriving the necessary statistical tests, we then showcase its practical application in assessing the historical performance of pension fund administrators operating within the Peruvian Private Pension System.

Pension Fund Administrators and Financial Transparency of Retirement Savings Funds in Nigeria

Pension Fund Administrators and Financial Transparency of Retirement Savings Funds in Nigeria

Pension Management Challenges and Retirement Life Experiences: A Policy Implication

Remarking on the discourse of pension management in Nigeria, scarce research attention can be traced to the understanding of pension management challenges and life after retirement experience through the prism of policy implication. To address this gap, the study assesses the pattern of pensioners’ life after retirement, the arrays of pension management challenges, and appropriate policy implications for effective pension management. A mixed-method research approach was employed. 345 retirees were randomly recruited and administered a questionnaire, and 18 purposively semi-structured interviews were conducted with the Federal Parastatals and Private Sector Pensioners Association of Nigeria. Quantitative data were analyzed with the frequency distribution and the Q-Q plot to determine the normal probability plot, while the NVivo (12) qualitative software was used for the identification of themes and sub-themes from the transcribed data. Findings revealed prolonged health challenges, poverty, and abrupt pension payment as life after retirement experiences. Verification bottleneck, poor monitoring and evaluation efforts, and administrative incompetency were issues around pension management challenges. The implication includes addressing political interference in pension management and administration, safeguarding retirees’ savings through legal commitment, and a call for employers’ contributions. The study recommends that the National Pension Commission become more responsive in its role of providing quality pension service, especially in terms of quality leadership, monitoring, and evaluation of Pension Fund Administrators.

Effect of Pension Fund Investment on Pension Fund Performance in Nigeria

The study explored the intricate relationship between Pension Fund Investment (PFI) and the performance of pension funds in Nigeria, specifically focusing on Benefit Paid (BFP) and Investment Income (INVTI). The analysis employs regression models and statistical measures to unravel the dynamics at play within the pension fund ecosystem. The study employed ex postfacto research design to examine the effect of pension fund investment on pension fund performance in Nigeria. The regression analysis reveals a positive and statistically significant relationship between Pension Fund Investment and Benefit Paid, suggesting that increased investment positively influences the amount disbursed as benefits. In contrast, the study identifies a negative association between Pension Fund Investment and Investment Income, indicating potential challenges in generating income from investments. Given the positive relationship between Pension Fund Investment and Benefit Paid, pension fund administrators should continue to explore investment strategies that enhance fund performance, ultimately leading to increased benefits for pensioners.

Effect of Corporate Governance Mechanisms on Financial Performance of Pension Fund Administrators in Nigeria 2014 To 2022

Effect of Corporate Governance Mechanisms on Financial Performance of Pension Fund Administrators in Nigeria 2014 To 2022

Tasa de interés de los créditos de consumo y recaudación del impuesto general a las ventas en Perú

Objective: Determine the correlation between the interest rate on consumer loans and the collection of the Value Added Tax in Peru during the period 2011-2022. Methods: The research was descriptive and correlational in nature. To measure the relationship between the variables, the Spearman correlation coefficient was used, which is suitable for data that do not meet the normality conditions. A total of 144 monthly observations were analyzed, obtained from the Superintendence of Banking, Insurance and Pension Fund Administrators and the National Superintendency of Customs and Tax Administration. Results: There is a positive correlation between the interest rate on consumer loans and the collection of the value added tax in the period from January 2011 to December 2022. Conclusion: When the interest rate on consumer loans increases, so does the collection of the Value Added Tax. However, the relationship between these variables is not constant and may be subject to changes at different times.

Nexus Between Pension Funds and Stock Market Sustainability Development in Nigeria

Objective: It has long been recognized that pension systems across the emerging markets including Nigeria have undergone dramatic reforms over the last twenty-eight years. This process has mainly been fueled by the demographic problem faced by modern financial systems. Hence, this study examines the short-run and long-run dynamic of pension funds on capital market development in Nigeria using ex-post facto research design. Method: Data were collected from the Central Bank of Nigeria (CBN) statistical bulletin and annual report of the pension fund commission from 1995 to 2022. Data collected were analyzed using descriptive statistics, unit root test and auto regressive lag model (ARDL) and Toda Yamamoto multivariate granger causality approach. The unit root test reveal that all the variables used in the study are non-stationary at first difference except inflation which is stationary at level. Results: The findings from the ARDL analysis reveal a short-run dynamic impact between pension funds and capital market development due to the coefficient of error correction mechanism (speed of adjustment) which is negative and significant at 5% level of significant. The result suggests that over 22% of the short run disequilibrium is corrected in the long run equilibrium. However, the results from the long-run dynamic impact reveal a positively significant impact between the proxies of pension funds (pension contributory fund, pension investment) and control variable - inflation to be positively significant with capital market development proxied by market capitalization as a ratio to GDP at 5% level of significant. The results of the Toda Yamamoto granger causality results suggest a bidirectional relationship between pension funds (pension contributory fund, pension investment) and market capitalization as a ratio of Gross Domestic Product (GDP) in Nigeria at aggregate level. This suggest that the relationship between pension funds (pension contributory fund, pension investment) and market capitalization as a ratio of Gross Domestic Product (GDP) in Nigeria was two-ways. Conclusion: The study concludes that pension fund administrators in Nigeria should understand that the rate of inflation is dynamic in Nigeria and the value of money is being lost as money is not worth it values in the next five years.

The Roles of Funding Gaps and Life Expectancy in Retirement Income Adequacy

One of the issues leading to retirement income inadequacy under the defined contribution (DC) pension scheme has been attributed to funding gaps. Funding gaps under DC occur when pension contributions as well as investment returns are not regularly credited to employees’ retirement saving accounts (RSAs). In order to determine the effect of funding gaps and life expectancy on retirement income security, this study investigated how determinants of funding gaps and life expectancy affect accumulated funds. The findings showed that employer’s compliance, role of Pension Fund Administrators (PFAs), and years of remittance defaults have a positive and significant effect on funding gaps. In contrast, the role of Pension Commission (PenCom) has negative effect on funding gaps. Meanwhile, further investigation revealed that both funding gaps and life expectancy significantly accounted for 83.1% of accumulated pension funds. These findings led to the conclusion that the active roles of PenCom have assisted in recovering up to 62.5% of funding gaps back to employees’ RSAs in Federal Universities in Nigeria. Following the adverse effect of the role of PFAs on accumulated funds, the study recommends that regulatory body should carefully monitor their activities so as to ensure total compliance that will further narrow the existing finding gaps of DC.

NIGERIA ECONOMIC GROWTH AND CAPITAL MARKET DEVELOPMENT: DOES CONTRIBUTORY PENSION SCHEME MATTER?

Whether the contributory pension scheme (CPS) has addressed the shortage of capital for investments, the challenge of full compliance with the system and the shortage of investment outlets spurred the interest to investigate the impact of the CPS on capital market development and economic growth from 2005 to 2021. Secondary data was adopted for this study, and the data were extracted from the National Pension Commission and world development indicators. The study employed the auto-regressive distribution lag (ARDL) model as an estimation technique. The empirical results show that among the proxies for gross domestic product, total pension fund asset (TPFA) was significant in both the short and long run, which showed that a 1% increase in TPFA would produce a 0.0028% increase in the GDP. Also, among the proxies for capital market development, total pension fund asset (TPFA) was significant in both the short and long run, which showed that a 1% increase in TPFA would produce a 0.024% increase in capital market development. Based on these findings, the study concluded that CPS influenced capital market development and economic growth. Consequently, this study recommended, among others, that the NPC should continue to partner with relevant stakeholders such as pension fund administrators and custodians by making its investment regulations more flexible and encouraging increased pension fund investments.

Factors Influencing the Financial Performance of Pension Fund Administrators in Nigeria

This research studies the impact of board size, board independence, gender diversity, and density contribution on the financial performance of pension fund administrators in Nigeria. It aims to identify the difference in performance between the sets of funds, which are based on the recent multi fund structure classification system. This study uses 20 of the 22 PFAs firm-year panel data for a 3-year period ranging from 2018 to 2020 to analyse the findings. Analysis of variance and panel regression analysis are employed to analyse the relationship between the sets of factors and the financial performance of each of them. Results revealed that there are significant differences in performance between the funds. The findings established the fact that board independence and density contribution significantly influence the financial performance of funds, while board size and gender diversity have no significant impact on the financial performance of funds. The findings provide evidence on the performance of the different categories of fund, which will help the contributor(s) to decide on whether to stay on their default fund or move to another fund. Furthermore, the findings of this study should be of interest to managers and boards of companies in making appropriate choices about corporate governance tools and firm characteristics to improve company’s financial performance.

Effect of Pension and Insurance Funds on Financial Deepening in Nigeria

This study examines the effect of pension and insurance funds on financial deepening in Nigeria for the period 2012Q1 to 2023Q1. Quarterly time series data for pension funds, insurance funds and financial deepening were collected from the Central Bank of Nigeria statistical bulletin. Philip Perron test was used to test the stationarity of the data and the ARDL Bound cointegration test was utilized to determine the presence of long-run relationship. The Fully Modified Ordinary Least Squares regression method was used to test the effect of pension and insurance funds on financial deepening in Nigeria. The findings showed that there was no long-run relationship among the variables, while pension funds have a significant effect on financial deepening in Nigeria, insurance funds do not have a significant effect on financial deepening in Nigeria. It was recommended that, in other to increase the financial depth of the Nigerian economy, a critical upward review of the investment outlet available to pension fund administrators should be done. On the other hand, the Central Bank of Nigeria in collaboration with the National Insurance Commission can take advantage of opportunities in the insurance industry, especially by enforcing all the mandatory insurance policies given by law.

The Characterization of Population Preferences and Assessments of Retirement Systems: Evidence from Chile

This paper studies population preferences and assessments of retirement systems in Chile. I use a unique survey that allowed me to construct individuals’ evaluations of different pillars within retirement systems (e.g., individual, solidary, and state-funded pillars), and their evaluations of current system performance and private pension fund administrators using attitudinal responses. The results imply that social well-being is an important consideration among high-income, highly educated individuals. College-educated individuals were significantly (6.8%) more likely to agree with a solidary pillar funded by contributors, while 1% increases in income significantly increased the likelihood of preferring a system with a solidary component (by 0.5%). This group was also more demanding with regard to the performance of the system and pension fund administrators. The findings also demonstrate that gender is a crucial determinant: men were consistently more likely than women to agree with the three-pillar model and social investments. This result suggests that women should be a specific target in communication campaigns when reforms are being designed and implemented.

Role of pension management on economic growth: A review of literature

Pension funds enable individuals to save over their working lives to finance their consumption needs in retirement, either through a lump sum or through the provision of an annuity, while also supplying funds to end-users such as corporations, other households (via securitized loans), or governments for investment or consumption. The study's goal is to investigate the impact of pension management on economic growth. A desktop literature review was used for this purpose. Relevant seminal references and journal articles for the study were identified using Google Scholar. The inclusion criteria entailed papers that were not over ten years old. The study concluded that contributory pensions have the potential to increase GDP with competent risk and portfolio management by pension fund administrators and custodians (GDP). The findings indicated a positive relationship between retirement pension assets and economic growth. The study recommends that policymakers and pension fund regulators devise feasible methods for investing pension money to benefit the economy while also maintaining the safety of the invested assets so as not to risk the interests of pension fund owners. To enhance economic growth, the study also suggested eliminating pension fund management delays, administrative bottlenecks, and corruption.

Assets holding and financial performance of pension fund administrators in Nigeria

Pension funds are founded to ensure contributors benefit from regular or lump sum income uponretirement. The financial performance of pension funds in Nigeria seems fraught with uncertainties, riskand delay in payment of benefits thus raising doubts whether they can be able to achieve their primaryobjective. This study was carried out to evaluate the relationship between assets holding and financialperformance of Pension Fund Administrators (PFAs) in Nigeria. 21 PFAs were examined under this studythrough judgmental sampling. The study sourced secondary data from PFAs. The data collected relates toinvestment in classes of asset and the investment reports on dividend income, interest income and rentalincome. The data was analyzed using correlational statistics to determine if there is a significant statisticaldifference in the asset classes and component of investment income. Assessments of association betweencomposition of the various pension fund portfolio and the amount of the various asset classes vis a vis theinvestment income earned were also made to find out if diversification of the portfolio affects the financialperformance of the pension funds. The research revealed that the collection of assets by the PFAs affectthe financial performance of the pension funds. From the analysis it is clear that assets holding is positivelyand statistically significant with the financial performance of PFAs. Therefore, it is very critical for PFAs toconsider the assets mix in the fund management without over-exposure to a particular asset.Key words: assets holding, financial performance, pension fund administrators.

The Impact of Retained Earnings on the Financial Growth of Pension Fund Administrator (PFA) Companies in Nigeria.

The study examined the relationship between retained earnings and growth of companies in Nigeria. There is a gap in investors’ knowledge as to the relationship between retained earnings and the growth of corporate organisations. The model of retained earnings of some Companies in Nigeria does not follow the pattern of a growth inclined strategy; this has always impacted negatively on growth and expansion as well as the operational efficiency (operating expenses) and value of some companies in Nigeria because they fail to reflect their intrinsic value. For organisation to grow well it must be able to leverage on the advantage of the cheapest source of financing from the available alternatives such as retained earnings. The population for the study is 20 registered and licensed Pension Fund Administrators (PFAs) in Nigeria. Sample of the top four (4) PFAs in terms of their Asset Under Management (AUM) was taken from the population and examined. Data were collected through panel secondary source from the websites of the various PFAs from 2016 to 2020 and these were analysed using panel regression analysis to establish the effect of Retained Earnings (RE) and Operating Expenses (OPEX) on Gross Earnings in these companies. The results revealed that fixed effect panel is plausible and it establishes a significant positive relationship between retained earnings and the gross earning or growth of these companies in Nigeria. The study therefore concludes that retained earnings are an essential method of financing for PFAs’ operations. It is recommended that the PFAs in Nigeria need to improve design strategies that can be used to increase their earnings, to prevent future shocks, and operating expenses (OPEX) which is the lubricant for growth in these companies should be used wisely. Keywords: Dividend pay-out, Dividend Policy, operating expenses, Gross earnings, Retained earnings, Strategies.

Equity fire sales and herding behavior in pension funds

This study analyzes the effects of a regulatory shock that generates pressure to sell the excess equity investment maintained by Chilean Pension Fund Administrators (AFPs). This quasi-natural experiment allows us to gauge the impact of fire sales in an emerging economy with a strong presence of institutional investors allocating portfolios in the context of herding behavior. The sample consists of panel data for pension funds and equities in their portfolios. We find that herding is relevant when explaining the pressure to sell stocks after the regulatory shock. In addition, AFP sales decision-making considers stock characteristics such as stock ownership, market capitalization terciles of the traded companies, breadth of ownership, and stock illiquidity. These results are relevant for policymakers and capital market participants alike when analyzing portfolio decision-making in pension funds.

Post COVID-19 and the Acceptance of Financial Inclusion as a New Normal in Financial Transactions: Implications for Nigerian Accountants and Other Financial Service Providers

This study examined the preparedness of financial service providers to launch into the post COVID-19 era, using financial inclusion as a new normal in their clients’ financial needs. The study adopted the survey research design, using a judgmental sampling technique. The questionnaire was used as the method of collecting data from 102 respondents, drawn from accounting firms, insurance companies, financial houses and pension fund administrators in Nigeria. With the aid of descriptive and inferential statistics, the hypotheses were tested at 5% level of significance. The findings revealed that there is a significant relationship between the socio-economic development structure in Nigeria and the acceptance of financial inclusion as a new normal in financial transactions. It was recommended that the public and private financial institutions be ready to provide the enabling environment for financial technology to thrive as a driver for financial inclusion in the Nigerian developing economy. Keywords: COVID-19 pandemic, financial technology, financial inclusion, new normal, financial service providers

CONTRIBUTORY PENSION SCHEME ON NIGERIA ECONOMIC GROWTH

This study was embarked upon to provide empirical evidence on the effect of contributory pension scheme on economic growth in Nigeria. Data for the study were secondary sourced from various records of PenCom Annual Reports and CBN Bulletin (database). The data were computed with the use of Statistical Package for Social Sciences (SPSS). It was concluded that pension fund assets and pension contribution /savings mobilized over the years have positive and insignificant impact on economic growth. The implication of this finding is that the authorities concerned have not been able to use the pension fund asset and savings mobilized to boost economic growth in Nigeria. It was therefore recommended that, there should be more emphasis on the management of pension assets in the capital market as well as government bond, real estate and investment trust to boost Gross Domestic Product (GDP) of the country (Nigeria). Secondly, there should be prompt reconciliation between Pension Fund Administrators (PFAs) and Pension Fund Custodians. This will bring transparency and accountability to the system. Finally, PenCom should ensure effective monitoring, supervision and enforcement of the provision of the PRA 2004, which are the inevitable ingredients in the Contributory Pension Scheme towards Gross Domestic Product (GDP).

Prevention, Detection and Control of Fraud by Pension Fund Administrators (PFA) and Pension Fund Custodians (PFC) Under the Pension Reform Acts 2004 And 2014

This paper examines the challenges of prevention, detection and control of fraud by Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) under the Pension Reform Acts, 2004 and 2014. It holds the view that since the activities of the PFAs and PFCs are critical to the attainment of the objectives of the Acts, their prescribed roles must be sufficiently monitored for compliance. The paper examines the concept of fraud, the roles of PFAs and PFCs and suggests some of the following control measures against fraud in pension fund management: installation of an effective accounting and internal control systems, ensuring that employees understand relevant codes of conduct, establishment of virile internal audit and appointment of audit committee among others. The paper concludes by recommending some for reaching steps to prevent and control fraud in pension funds management. These include; monitoring of RSA opening by senior staff, strengthening of pay procedure, and recruitment of right caliber of staff etc. Keywords: Internal Control, Compliance, Pension Fund Administrator, Pension Fund Custodians 1. INTRODUCTION