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close this section of the library Sen, Uday Raj

View the PDF document Determinants of withdrawal choice of pension funds : evidence from Fiji
Author:Sen, Uday Raj
Institution: University of the South Pacific.
Award: M.A.
Date: 2009.
Call No.: pac In Process
BRN: 1176983
Copyright:Under 10% of this thesis may be copied without the authors written permission

Abstract: Social security institutions, whether run by private sector or public sector are quite important and forefront of policy dialogue in developing countries. There are various reasons for it. Firstly, it tends to facilitate national savings thus promoting economic growth via investment. Secondly, if owned by the private sector partially or fully, it tends to reduce a significant burden from the state in terms of welfare payouts/benefits for the retired. Thirdly, social security is quite important for individual workers given the fact that it redistributes resources both within and across generations. Social security savings of a worker is a very important form of support during old age. The ability of a social security system to play these roles successfully depends on a number of factors including the choice the retiree makes on being eligible to withdraw its social security fund. In this study, a total sample of 360 pensioners was included. The study revealed that the majority of the pensioners, 74%, opted for lump sum withdrawal. The pensioners were also asked for key reasons for deciding on a particular option. For those choosing the pension option, the largest number reported a steady source of income as the reason for choosing pension option. The other reason receiving second highest score was the retirees ability to meet the needs of his family while the third highest score was given to the reason of not to be dependent on the children. For the retirees who chose the lump sum option, the foremost reason was related to buying of house, car or paying of mortgages. The second largest score was given to the reason of world tour or overseas visit. Medical bills and children’s education were another important reason for decision to withdraw in lump sum. The quantitative modelling results indicate that that the variables ethnicity, total value of pension at retirement, total value of assets and cash at bank at retirement significantly determine an individuals probability of pension choice option. The results from this study can be of great use by policy makers to reform the pension system of Fiji.
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