PERFORMANCE OF PENSION SCHEMES IN NAIROBI CITY COUNTY: THE PARADOXICAL EFFECTS OF RISK MANAGEMENT STRATEGIES
Abstract
The general objective of this study was to assess the effect of risk management strategies on performance of pension schemes in Nairobi City County, Kenya. Specifically, the study sought to establish the effect of risk identification, risk assessment, risk response and risk monitoring and review on performance of pension schemes in Nairobi City County. This research was based on risk management theory, modern portfolio theory, agency theory, and resource-based view theory to explain the relationship between the study variables. The population for the study was all the 48 individual pension schemes in Nairobi City County, Kenya. Since the population was relatively small, the study was a census. The target respondents were the heads of risk, heads of finance and heads of operations in each scheme or their equivalent, giving a total of 144 respondents. The study made use of both primary and secondary data. Primary data was collected through structured questionnaires and was analysed through descriptive and inferential statistics by use of means, standard deviation, correlation and regression analyses using SPSS version 27. Data was presented in the form of frequency tables. The regression results revealed an R Square of 0.931, indicating that 93.1% of the variation in performance was explained by the four risk management strategies. The ANOVA results showed that the overall model was statistically significant (F = 438.870, p = 0.000). The regression coefficients for the independent variables were all positive and significant: risk identification (β = 0.238, p = 0.000), risk assessment (β = 0.425, p = 0.000), risk response (β = 0.231, p = 0.000), and risk monitoring and review (β = 0.695, p = 0.000). The study concluded that each of the four strategies significantly contributes to the performance of pension schemes, with risk monitoring and review being the most influential. The study recommends that pension schemes strengthen stakeholder involvement in risk identification, integrate risk assessment results into decision-making, enhance employee training in risk response, and institutionalize dynamic risk monitoring and review mechanisms to support continuous improvement and strategic agility.
Keywords: Performance, risk management strategies, risk identification, risk assessment, risk response, and risk monitoring and review
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