Dublin Core
Title
Financial Performance of Private Pension Funds in Ghana: The Effect of Risk Management
Creator
Esther Asiedu, Nana Kwame Owusu Ansah, Afia Nyarko Boakye, Ebenezer Malcalm
Description
Purpose
In Ghana, recently the financial performance of the private pension schemes has gone up tremendously. The purpose of this study is to investigate how risk management methods influence the financial performance of private pension schemes.
Design/Methodology/Approach
The study randomly selected, 450 private pension managers that have existed for at least five years. Financial reports from these schemes were used to analyse key financial indicators, which include the return on assets (ROA) profitability ratio, the company’s size, net investment income, and contribution to the total fund ratio. The research investigation looks at how approaches to risk management affect these pension funds’ financial performance by employing a hierarchical multiple regression model.
Findings
The results demonstrated a strong correlation between firm size, net investment income, contribution to total funds, and the financial performance of private pension funds. From the hierarchical multiple regression model, specific risk management practices, such as those related to stakeholders involved in policy formulation, the risk management framework, response strategies mitigation and enhancement, and internal controls, were identified as significant contributors to the financial performance of pension funds.
Practical Implications
The study suggests that the National Pensions Regulatory Authority (NPRA) should adjust investment guidelines based on these insights, empowering pension fund managers to implement effective risk management practices.
Originality/Value
Research on risk management has predominantly been in the banking sector …
In Ghana, recently the financial performance of the private pension schemes has gone up tremendously. The purpose of this study is to investigate how risk management methods influence the financial performance of private pension schemes.
Design/Methodology/Approach
The study randomly selected, 450 private pension managers that have existed for at least five years. Financial reports from these schemes were used to analyse key financial indicators, which include the return on assets (ROA) profitability ratio, the company’s size, net investment income, and contribution to the total fund ratio. The research investigation looks at how approaches to risk management affect these pension funds’ financial performance by employing a hierarchical multiple regression model.
Findings
The results demonstrated a strong correlation between firm size, net investment income, contribution to total funds, and the financial performance of private pension funds. From the hierarchical multiple regression model, specific risk management practices, such as those related to stakeholders involved in policy formulation, the risk management framework, response strategies mitigation and enhancement, and internal controls, were identified as significant contributors to the financial performance of pension funds.
Practical Implications
The study suggests that the National Pensions Regulatory Authority (NPRA) should adjust investment guidelines based on these insights, empowering pension fund managers to implement effective risk management practices.
Originality/Value
Research on risk management has predominantly been in the banking sector …
Publisher
Scientific Research Publishing
Date
2024
Source
https://scholar.google.com/citations?view_op=view_citation&hl=en&user=DA2jtasAAAAJ&citation_for_view=DA2jtasAAAAJ:kNdYIx-mwKoC
Language
English