New Release
The Kenyan Pension Industry (“the Industry”) drives economic growth by mobilizing savings, financing infrastructure, and supporting SMEs while serving as a cornerstone for wealth creation and retirement security. The pension industry in Kenya is segmented into five types of retirement benefits schemes reflecting the diverse needs and preferences of participants while ensuring regulatory compliance and effective risk management. Over the last five years, the Kenyan pension industry’s assets under management (AUM) grew at a compound average growth rate (CAGR) of 6.9% and is expected to continue growing in the near term driven by several factors including the increasing population, rising financial literacy levels and the growing economy. An average of 44.2% of the pension funds was invested in government securities over the last five years largely due to the low-risk nature of government securities and attractive yields offered by the Government of Kenya. We expect the pension schemes’ performance to continue growing hinged on the enhanced contribution of formal sector members of the NSSF following the revision of rates in February 2023 from Kshs 400 to 12% of a worker’s monthly pensionable income. Furthermore, the increasing demand for retirement savings products, the growing interest in sustainable investing and the increasing role of technology are expected to underpin Industry growth in the medium to long term.
The 2024 Kenyan Pension Industry Risk Report captures the following:
