An Investigation Of Factors Affecting Extension Of Retirement Age - A Survey Of Commercial Banks In Nyeri Town.

ABSTRACT

As theyface the challenges of population ageing, governments in many countries are considering

howto increase labour-force participation by older workers and discourage early retirement. In

Kenyathe government increased the retirement age from 55 to 60 years with effect from 1st April

2009. The purpose of this study was to investigate the factors affecting the extension of

retirementage with special reference to Commercial Banks in Nyeri Town. The study was

carriedout to address the factors influencing extension of retirement age in Kenya from fifty five

yearsto sixty. The objectives of the study were to determine how extension of retirement age

influencepreservation of the organizational corporate knowledge, provides a system for effective

succession management, creates a flexible and responsive workforce, increases return on

investmenttraining and development, reduce the rate of staff turnover and better ability to

respondto older clients and their needs. The study adopted descriptive research design where the

targetpopulation was the 12 commercial banks in Nyeri Town. The population in the study was

the 168 employees of the participating commercial banks. Random sampling with a sample of

30% of the population was taken. The researcher solely conducted the field work during data

collection,recording, sampling, editing, tabulation and analyzing it. Descriptive statistics and

someinferential statistics were used to analyze the data. The study found that preservation of

knowledgehad a high influence on the extension of retirement age (Mean = 1.88, SD =1.54).

The return on investment was also found to have a high influence on the extension of the

retirement age (Mean = 1.64, SD =1.02). The rate of staff of turnover however had a low

influenceon the extension of the retirement age (Mean = 1.88, SD = 0.625). Just like staff

turnoversuccession planning also had a low influence on the extension of retirement age (Mean

= 1.57, SD= 1.02). Increased return on investment (56%) arose as the most influencing factor

affectingthe extension of the retirement age followed by preservation of corporate knowledge

(30%). The researcher concluded that hiring of professional trainers as well as training materials

came at a cost. As such, the company would want a return on its investment in terms of

employee performance. The study recommended that the banks should embrace traditional

training methods since they are more cost effective and efficient at the same time.