Influence of Investment Management Practices on Sustainability of Pension Funds Administrative Institutions in Kenya

Abstract

This study sought to evaluate the influence of investment management practices on the sustainability of pension funds administrative institutions (PFAIs) in Kenya. The study adopted a correlation research design with a target population of 85 PFAIs operating in Kenya from 2008 to 2016. Stratified sampling technique was used to select the sample size and a sample size of 70 PFAIs was drawn from the target population using Slovin's formula. The study utilized both primary and secondary data with the primary data collected using structured questionnaire and data was analysed using descriptive and inferential statistics in SPSS version 20.The reliability of the instrument was tested by using Cronbach alpha, correlation analysis to test the strength of the relationships between the variables and linear regression was used to determine the form of the relationship between the dependent and independent variables. The results show that investment management practices significantly and positively influences the financial sustainability of PFAIs in Kenya (r² = 0.208, p< 0.05).It is therefore recommended that PFAIs management should consistently review investment strategies and investment guidelines with a view to enhancing investment choices that are fully compliant with the investment policy statements (IPS) to improve on their operational and financial sustainability.