An evaluation of the effect of corporate governance and macroeconomic variables on financial performance of pension schemes in Kenya

The study investigated the impact of corporate governance (CG) and macroeconomic variables on the financial performance of pension schemes in Kenya thereby addressing the key research question: What is the effect of CG and macroeconomic variables 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 and macroeconomic variables from 2012 to 2020 as well as qualitative data on CG indicators 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 indicators to develop the CG index. The findings show that effect of CG indicators on pension performance was positive and significant. The moderating effect of macroeconomic variables was significant whereas the joint effect of CG indicators and macroeconomic factors on pension funds performance was significant. The individual contribution of both factors was nevertheless varied. The main conclusion of the study is that pension fund financial performance is influenced by both CGand macroeconomic factors implying that there is need to take into account the impact of these factors in the execution of investment plans of pension funds to ensure generation of adequate funds for retirement benefits.