Measurement and Evaluation of the Efficiency of Tanzania Pension Funds

Journal of Innovation and Social Science Research

ISSN :

Mwambuli, E. (The Institute of Finance Management)

Aticle Publication Date : 14-10-2025


Abstract

This study measured and evaluated the efficiency of public pension funds in Tanzania, focusing on the Public Service Social Security Fund (PSSSF), which serves public sector employees. Tanzanian pension funds face significant challenges, including delays in pension payments and declining investment returns due to underperforming portfolios. Using non-parametric Data Envelopment Analysis (DEA) with an input-based Banker, Charnes, and Cooper (BCC) model, the study assessed the efficiency of the public pension funds in Tanzania across 25 regional pension fund offices in Mainland Tanzania, treated as Decision-Making Units (DMUs). Three input variables: number of staff, administrative costs, as well as advertisement and promotion costs; and two output variables: membership growth rate and pension payout ratio were analyzed. Efficiency scores were calculated to evaluate resource utilization. Results revealed that none of the DMUs achieved maximum efficiency, suggesting that resources could be reduced without affecting outputs. Furthermore, efficiency was significantly and negatively influenced by the number of staff and administrative costs, while advertisement and promotion costs had no significant impact. The study concludes that the number of staff, administrative costs, as well as advertisement and promotion costs collectively affect the efficiency of pension fund. The study recommends that the Government, through PSSSF, should evaluate regional office operations and reallocate resources optimally to enhance efficiency and maximize outputs

Keywords

Pension Funds Efficiency Data Envelopment Analysis Pension Payout Ratio Membership Growth Rate

Citation

Mwambuli, E. Nyoni, F. (2025), "Measurement and Evaluation of the Efficiency of Tanzania Pension Funds", Journal of Innovation and Social Science Research, Volume 2 Issue 2
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