Kenya’s retirement benefits industry closed December 2025 with Assets Under Management (AUM) of Ksh2.81 trillion, underscoring sustained growth in contributions and investment performance. See the full report here
According to the Retirement Benefits Authority Industry Brief of December 2025, AUM expanded by 11.06% between June and December 2025 (from Ksh2.53 trillion to Ksh2.81 trillion) and by 24.57% year-on-year, representing an increase of Ksh554 billion from December 2024. This growth was supported by Ksh157.06 billion in new contributions and Ksh122.87 billion in investment income and valuation gains over the half-year period.
Key Drivers of Growth
The third year of implementing the National Social Security Fund Act significantly strengthened inflows into retirement schemes. Contribution limits increased to a lower limit of Ksh8,000 and an upper limit of Ksh72,000, materially broadening the contribution base and improving long-term savings accumulation.
The macroeconomic environment remained supportive. Inflation averaged 4.4% in the second half of 2025, within the government’s target range, while the Kenya Shilling remained stable at an average of Ksh129.18 against the US Dollar. Over the same period, the Central Bank Rate eased to 9.0%, creating a favourable investment climate.
Capital markets recorded strong gains at the Nairobi Securities Exchange (NSE). The Nairobi All Share Index (NASI) the benchmark index that measures the overall performance of all listed ordinary shares at the NSE rose by 22%, while the NSE 20-Share Index increased by 29% in the second half of 2025.
Investment Portfolio Structure
The industry’s portfolio remains predominantly allocated to traditional asset classes, which account for over 90% of total AUM.
- Government Securities (52.14%) – Ksh1.47 trillion
Continued to anchor portfolios, although growth moderated as yields declined following monetary easing. - Quoted Equities (11.13%) – Ksh312.84 billion
Recorded strong half-year growth of 22.6%, driven by rallies in blue-chip counters. - Guaranteed Funds (18.59%) – Ksh522.39 billion
Remained attractive, particularly for smaller schemes seeking stability and capital preservation. - Immovable Property (8.57%) – Ksh240.96 billion
Posted modest growth, with relative allocation easing slightly in favour of more liquid instruments.
At the same time, diversification into alternative and specialised assets gained momentum. Listed corporate bonds rose sharply to Ksh28.29 billion, supported by infrastructure-backed issuances. Private equity grew by 49.23% to Ksh29.93 billion, while unquoted equities nearly doubled to Ksh 8.90 billion. Commercial paper and non-listed bonds expanded significantly to Ksh12.06 billion, and REITs and Shariah-compliant funds continued to attract increased allocations. All asset classes remained within statutory investment limits under RBA Regulations.
Contribution Trends and NSSF Performance
Total half-year pension contributions reached Ksh157.06 billion, reflecting a 22.42% increase from June 2025. Contributions to Post-Retirement Medical Funds (PRMF) also increased by 13.55% to Ksh186.9 million (quarterly), demonstrating growing emphasis on post-retirement healthcare security.
The National Social Security Fund (NSSF) reported net assets of Ksh623.79 billion, an 11.78% increase over six months. Approximately 79% of its assets were allocated to government securities and listed equities. Half-year contributions stood at Ksh43.48 billion, reflecting a marginal 3.05% decline largely attributable to Tier II opting-out trends.
Key Industry Indicators
The industry’s liquidity ratio stood at 71.08%, indicating strong capacity to meet short- to medium-term benefit obligations. The pension-to-GDP ratio reached 16.05%, slightly above the non-OECD average (15.2%) but below OECD levels (92.2%), signalling continued room for long-term system deepening and expansion.
Outlook for 2026
The sector remains well-positioned for continued growth, supported by sustained contribution momentum under NSSF reforms, macroeconomic stability, and regulatory space for greater diversification into infrastructure and alternative assets. However, declining interest rates may compress fixed-income yields, encouraging schemes to adopt more diversified and growth-oriented strategies.
The Bigger Picture
With pension assets now exceeding Ksh2.8 trillion, Kenya’s retirement benefits sector continues to play a pivotal role in long-term capital formation, infrastructure financing, capital market development, and overall economic stability. The expanding asset base reinforces the sector’s strategic importance within Kenya’s financial ecosystem and its contribution to sustainable economic growth. See the full report here
