Exploring factors influencing the uptake of individual pensions by employees of the Local Authorities Superannuation Fund (LASF) In Lusaka

Abstract

Many employees of the Local Authorities Superannuation Fund (LASF) in Lusaka overlook the necessity of making individual pension arrangements to supplement their statutory pensions, posing a significant risk to their financial well-being in retirement. This study explored factors influencing the uptake of individual pension arrangements among LASF employees, examining the impact of financial literacy, institutional support, socioeconomic conditions, and psychological factors. Using a mixed-methods approach, quantitative data were collected from 43 LASF employees (81.1% response rate) through structured questionnaires, while qualitative insights were gathered via thematic analysis of open-ended responses. Findings revealed high financial literacy (M=3.95) but moderate institutional support (M=2.95), with significant concerns about retirement planning workshops (M=2.35) and limited pension schemes beyond statutory provisions (M=2.12). Socio-economic barriers included family financial obligations (M=3.79) and limited disposable income (M=2.72), despite 55.8% of respondents earning above ZMW 20,000 monthly. Regression analysis identified psychological factors as the strongest predictor of pension engagement (β=0.334, p<0.001), followed by financial literacy (β=0.298, p<0.001), socio-economic factors (β=0.256, p<0.001), and institutional factors (β=0.224, p=0.001), collectively explaining 61.2% of the variance (R²=0.612). Qualitative themes highlighted concerns about payment flexibility, benefit adequacy, and investment control in statutory schemes. Recommendations include enhancing financial literacy programs, reforming statutory pension frameworks for greater flexibility, integrating retirement planning into human resource development strategies, designing accessible pension products aligned with socio-economic realities, and encouraging employees to actively enhance financial literacy despite competing demands. These multi-stakeholder interventions would address the identified barriers and foster a more inclusive retirement planning culture among public sector employees in Zambia. Keywords: Retirement planning, individual pensions, financial literacy, psychological factors, socio-economic conditions, institutional support, public sector, Zambia