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Enhancing Efficiency of Pension Schemes through Effective Risk Governance: A Kenyan Perspective

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  • Sylvester Willys Namagwa

Abstract

The efficiency of pension schemes in Kenya invites elevated interest owing to the increasing pension contribution amounts and the expectation that benefits paid out of these schemes would protect members from old age poverty. The study investigates the intervening effect of risk management on the relationship between corporate governance and the efficiency of pension schemes in Kenya. The study employs panel data consisting of 896 observations from 128 schemes in a sample period from 2015 to 2021. The study finds that risk management significantly mediates the relationship between employee representatives on the board of trustees, as a component of corporate governance, and the efficiency of pension schemes. Consequently, the mediation effect of risk management indicates that when employee representatives are involved in governance, the presence of strong risk management practices ensures that their contributions lead to improved efficiency. Risk management, therefore, serves as a critical safeguard that enables governance structures to function more effectively and contribute to the overall performance of the scheme.

Suggested Citation

  • Sylvester Willys Namagwa, 2025. "Enhancing Efficiency of Pension Schemes through Effective Risk Governance: A Kenyan Perspective," Papers 2511.11416, arXiv.org.
    • Handle: RePEc:arx:papers:2511.11416
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    References listed on IDEAS

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    1. Munther Al-Nimer & Sinan S. Abbadi & Ahmad Al-Omush & Habib Ahmad, 2021. "Risk Management Practices and Firm Performance with a Mediating Role of Business Model Innovation. Observations from Jordan," JRFM, MDPI, vol. 14(3), pages 1-20, March.
    2. Barone Adesi, Giovanni & Platen, Eckhard & Sala, Carlo, 2025. "Managing the shortfall risk of target date funds by overfunding," Journal of Pension Economics and Finance, Cambridge University Press, vol. 24(2), pages 256-280, April.
    3. Christopher Mitei & Jane Omwenga & Joseph Ndururi & Peter Ngatia, 2025. "Management Innovativeness and Growth of Occupational Pension Schemes in Kenya," International Journal of Entrepreneurship and Project Management, IPRJB, vol. 10(1), pages 35-54.
    4. Songling Yang & Muhammad Ishtiaq & Muhammad Anwar, 2018. "Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy," JRFM, MDPI, vol. 11(3), pages 1-17, June.
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