Over the last three years, the Kenyan Pension Industry has been on a growth trajectory largely driven by the ongoing implementation of the 2013 NSSF Act and a stable macroeconomic environment. According to the Retirement Benefits Authority (RBA), Pension’s total assets under management (AUM) stood at Kshs 2.5 trillion as at 30 June 2025[1] and Agusto & Co. expects the Industry’s AUM to reach Kshs 3.2 trillion by the end of December 2026 anchored on the ongoing annual phased increase in NSSF contribution rates supported by favourable demographic trend mirrored by a growing working-age population and increased public awareness. Notably, the pension Industry’s overarching goal is to enhance financial security and provide a safety net for retirees, achieved through the coordinated efforts of multiple stakeholders managing pension assets and investment portfolios.
The bulk (92%)[2] of pensions AUM were concentrated in four asset classes – government securities, guaranteed funds, quoted equities and immovable property – with government securities continuing to dominate with just over half of total assets, underpinned by high investor confidence, stability in yields and accessibility as the Government of Kenya (GoK) increasingly relied on domestic borrowing. We expect emerging trends in asset allocation to persist, with a continued preference for more liquid investments and a growing interest in diversification as alternative asset classes present high-growth opportunities for pension funds. However, we note that the uptake of these alternative assets remains slow mainly due to their higher perceived risk, uncertainties of earnings and limited expertise among fund managers. In the near to medium term, Agusto & Co. expects more diversification in asset allocation and increased investments in alternative asset classes such as securitisations as fund managers leverage rigorous credit risk assessments to optimise returns while maintaining low-risk profiles for pension funds.
We note that the pension Industry is increasingly shaped by growing interest in alternative assets, digital innovations and financial technology (Fintech) integration, as well as ongoing regulatory reforms including the 2013 NSSF Act amendment and subsequent phased implementation. Despite the significant growth in AUM, the pension Industry remains exposed to several risks and market uncertainties such as concentration risk, limited coverage financial market volatility and cybersecurity and data breaches, that could impact returns, compliance and members’ confidence in the system. Nonetheless, the existence of a well-defined regulatory framework and strong oversight authorities such as the Retirement Benefits Authority (RBA), alongside improving macroeconomic conditions underpin the Industry’s resilience supporting its continued growth and strategic relevance in Kenya’s financial ecosystem.
The 2025 Pension Industry risk report highlights the following
