An Empirical Evaluation Of The Effect Of Investment Strategy And Corporate Governance On Financial Performance Of Pension Funds In Kenya

The study examined the effect of investment strategy (IS) and corporate governance (CG) on the financial performance of pension schemes in Kenya thereby addressing the key research question: What is the effect of IS and CG on the financial performance of pension funds in Kenya? Qualitative, quantitative and correlational research designs were used to assess the effect of these factors on financial performance of pension funds. Quantitative data on annual return of pension funds from 2012 to 2020 as well as qualitative data on CG indicators and IS were used in the study. Return on investments proxied pension fund performance. Primary data was collected using survey questionnaires from the pension schemes from the CG and IS indicators to develop both CG and IS indices. The findings show that CG as well as IS impact differently pension funding. Effect of CG indicators on pension performance was positive and significant. The intervening effect of IS on the link between CG and pension performance was significant. The individual contribution of CG indicators on pension performance, nonetheless varied. The main conclusion of the study is that pension fund financial performance is influenced by both CG and IS implying that there is need to take into account the effect of these factors in the execution of investment plans of pension funds to ensure generation of adequate funds for retirement benefits