Open Journal of Business and Management, 2024, 12, 818-833 https://www.scirp.org/journal/ojbm ISSN Online: 2329-3292 ISSN Print: 2329-3284 DOI: 10.4236/ojbm.2024.122042 Mar. 13, 2024 818 Open Journal of Business and Management Value Creation on Member Contributions in Zambian Pension Funds: Evidence for Imperative Investment in Financial Education Macmillan Handema 1 , John Lungu 2 , Mwansa Chabala 2 , Chanda Shikaputo 2 1 School of Business, University of Lusaka, Lusaka, Zambia 2 School of Graduate Studies, The Copperbelt University, Kitwe, Zambia Abstract This paper evaluated the extent to which pension funds in Zambia are grow- ing member contributions to inform the behavior of fund managers, policy- makers, and prospective retirees. Stacked data on annual pension fund finan- cial performance for the period between 2011 and 2020 was collected from the Pensions and Insurance Authority. Data on the performance of riskless government securities and annual inflation was obtained from the Bank of Zambia. Descriptive and inferential statistical techniques were used to analyze the data set. The study established that the industry was able to grow member contributions by a nominal average of 12% and 3% in real terms. The study also established that the Sharpe ratio was insignificantly negative in the short term and significantly negative in the long term. This implies that the pension fund industry failed to significantly grow member contributions for mea- ningful benefits. These findings also mean that DC pension funds will only provide minimal benefits while DB pension funds might have challenges in meeting their obligations. The study recommends that prospective retirees en- gage in other wealth-generating activities to supplement the retirement pack- age from the pension fund industry. It is also recommended that the govern- ment collaborates with training institutions to equip prospective retirees with the financial literacy skills needed for successful investment and entrepre- neurial undertakings. The study further recommends that policymakers and fund managers need to reflect on policy guidelines and investment strategies in the industry if pension funds are to provide meaningful benefits for income replacement and consumption smoothing in the deccumulation phase. Keywords Value Creation, Financial Performance, Member Contributions, Pension Fund, Financial Education, Pension Benefits How to cite this paper: Handema, M., Lun- gu, J., Chabala, M., & Shikaputo, C. (2024). Value Creation on Member Contributions in Zambian Pension Funds: Evidence for Im- perative Investment in Financial Education. Open Journal of Business and Management, 12, 818-833. https://doi.org/10.4236/ojbm.2024.122042 Received: February 17, 2023 Accepted: March 10, 2024 Published: March 13, 2024 Copyright © 2024 by author(s) and Scientific Research Publishing Inc. This work is licensed under the Creative Commons Attribution International License (CC BY 4.0). http://creativecommons.org/licenses/by/4.0/ Open Access