Kenyan pension schemes experienced a 33% rise in asset value to Sh2.53 trillion by June 2025, propelled by strong market performance, higher contributions, and legislative reforms boosting NSSF inflows.
The value of bond and equities holdings by Kenyan pension funds surged by 33 percent, equivalent to Sh398.1 billion, in the year leading to June 2025, largely driven by robust capital gains and increased contributions from scheme members. Data released by the Retirement Benefits Authority (RBA) highlights that bond holdings increased by Sh318.1 billion to Sh1.33 trillion, while equities investments rose by Sh80.2 billion to Sh255.2 billion over the same period.
This growth reflects not only positive market performance but also a significant rise in pension fund contributions, particularly influenced by enhanced National Social Security Fund (NSSF) deduction limits. Bonds and listed shares now constitute approximately 62.6 percent of pension funds’ total assets worth Sh2.53 trillion, while guaranteed funds account for 19.6 percent. The total asset base expanded by 27.9 percent, or Sh552 billion from Sh1.98 trillion in June 2024.
The RBA attributes the growth to a combination of factors, including a stable macroeconomic environment characterised by a steady exchange rate, favourable interest rates, and mild inflationary pressures. Equally pivotal was the implementation progress of the NSSF Act, 2013, which in its third year saw the statutory contribution limits raised, the lower limit increased to Sh8,000 and the upper limit to Sh72,000. This legislative change significantly boosted NSSF inflows, as higher contributions were deducted directly from employee salaries, matched by employer payments.
The revised NSSF contribution framework, effective from February 2025, saw monthly maximum contributions by employees and employers rise to Sh3,840, reflecting the elevated earnings thresholds. This adjustment, while increasing deductions and employer costs, aims to enhance retirement savings and financial security for workers.
In the equities market, the Nairobi Securities Exchange (NSE) recorded a robust 41.3 percent increase in market capitalisation to Sh2.42 trillion during the year to June 2025, aided by rising share prices of major blue-chip companies. These companies form a significant portion of pension fund equity holdings, underpinning the gains seen in the pension portfolios. The total NSE market valuation currently stands at Sh2.97 trillion following continued price appreciation in the latter half of the year.
On the bond front, high coupon infrastructure bonds issued in 2023 and 2024, with interest rates ranging from 14.4 percent to 18.5 percent, have been trading at premiums in the secondary market. This market dynamic reflects the inverse relationship between bond prices and yields, falling interest rates have increased bond prices, resulting in unrealised paper gains for pension funds holding these securities.
The preference for bonds by pension funds stems from their lower risk profile, making them attractive for safeguarding members’ accumulated wealth in volatile environments. Capital gains from these holdings, together with new contributions, have substantially fueled the robust growth in pension fund asset bases.
Industry experts note that while increased NSSF contributions add cost pressures for both employers and employees, the expansion in pension assets and strengthened financial security for retirees present a positive outlook. Future asset growth will likely hinge on maintaining macroeconomic stability and continued market performance, alongside evolving pension regulations.
Overall, the data from the RBA underlines a favourable investment climate for Kenyan pension schemes, with enhanced contributions and market gains converging to grow retirement savings at a significant pace.
- https://www.businessdailyafrica.com/bd/markets/pension-funds-stake-in-bonds-equities-up-33pc-5270308 – Please view link – unable to able to access data
- https://www.businessdailyafrica.com/bd/markets/pension-funds-stake-in-bonds-equities-up-33pc-5270308 – This article reports that the value of bond and equity holdings by Kenyan pension funds increased by 33% (Sh398.1 billion) in the year leading up to June 2025. The Retirement Benefits Authority (RBA) data indicates that bond holdings rose by Sh318.1 billion to Sh1.33 trillion, while equity investments grew by Sh80.2 billion to Sh255.2 billion. The growth is attributed to capital gains and higher contributions from scheme members, influenced by increased deductions towards the National Social Security Fund (NSSF). Bonds and listed shares now constitute 62.6% of pension funds’ total assets, with guaranteed funds accounting for 19.6%. Total assets grew by 27.9% (Sh552 billion) to Sh2.53 trillion in the same period. The RBA attributes this growth to a stable macroeconomic environment, including a stable exchange rate, favourable interest rates, and mild inflationary pressure. Additionally, the NSSF Act, 2013, implemented its third-year contribution limits increase, raising the lower limit to Sh8,000 and the upper limit to Sh72,000, significantly boosting contributions. The article also notes a 41.3% increase in the Nairobi Securities Exchange (NSE) market capitalisation to Sh2.42 trillion, driven by higher share prices of key blue-chip companies, which form a significant portion of pension fund investments.
- https://internalaudit.uonbi.ac.ke/latest-news/tax-alert-revised-kenya-nssf-contributions-effective-feb-2023 – This tax alert from the University of Nairobi’s Internal Audit Department discusses the revised National Social Security Fund (NSSF) contribution rates effective from February 2023. Following the enactment of the NSSF Act No. 45 of 2013, the Employment and Labour Relations Court’s previous declaration of the Act as illegal was overturned by the Court of Appeal in February 2023. Consequently, the Act became enforceable, leading to increased NSSF contribution rates. The monthly matching contributions by both employees and employers rose from KES 400 to 12% of a worker’s monthly pensionable income, with a maximum contribution of KES 2,160 for workers earning more than KES 18,000 per month. Employee contributions are deducted directly from their salaries, while employer contributions are remitted directly by the employer. Contributions for earnings below the lower earnings limit (up to a maximum of KES 720) are credited to a Tier I account, while the balance of contributions for earnings between the lower and upper earnings limits (up to a maximum of KES 1,440) are credited to a Tier II account.
- https://vialtopartners.com/regional-alerts/kenya-employment-tax-national-social-security-fund-nssf-2025-changes – This article from Vialto Partners outlines the changes to the National Social Security Fund (NSSF) contribution rates in Kenya, effective from February 2025. The lower earnings limit (LEL) for employees increased from KES 7,000 to KES 8,000, while the upper earnings limit (UEL) rose from KES 36,000 to KES 72,000. Consequently, the maximum monthly contribution for both employees and employers increased from KES 1,740 to KES 3,840. The article discusses the impact of these increased contribution rates, noting that employees will experience higher deductions, reducing their net take-home pay, and employers will face increased costs due to higher employer contributions. However, the article also highlights the positive aspect of these changes, emphasizing the potential for better retirement savings and financial security for workers in their later years.
- https://www.pwc.com/ke/en/assets/pdf/tax-alert-revised-nssf-feb-2024.pdf – This tax alert from PwC Kenya provides information on the revised National Social Security Fund (NSSF) contribution rates effective from February 2024. The lower earnings threshold for calculating NSSF contributions increased from KES 6,000 to KES 7,000, and the upper limit doubled from KES 18,000 to KES 36,000. The monthly contributions by employees and employers rose from KES 400 to 12% of the monthly pensionable earnings, with a maximum contribution of KES 2,160 for workers earning more than KES 18,000 per month. The alert details the breakdown of contributions, with employee contributions deducted directly from their earnings and employer contributions remitted directly by the employer. Contributions for earnings below the lower earnings limit (up to a maximum of KES 720) are credited to a Tier I account, while the balance of contributions for earnings between the lower and upper earnings limits (up to a maximum of KES 1,440) are credited to a Tier II account.
- https://www.pna.co.ke/wp-content/uploads/Tax-Alert-Updated-Kenya-NSSF-Contributions-Effective-Feb.-2023.pdf – This tax alert from PNA provides updated information on the National Social Security Fund (NSSF) contributions effective from February 2023. Following the enactment of the NSSF Act No. 45 of 2013, the Employment and Labour Relations Court’s previous declaration of the Act as illegal was overturned by the Court of Appeal in February 2023. As a result, the Act became enforceable, leading to increased NSSF contribution rates. The monthly matching contributions by both employees and employers rose from KES 400 to 12% of a worker’s monthly pensionable income, with a maximum contribution of KES 2,160 for workers earning more than KES 18,000 per month. Employee contributions are deducted directly from their salaries, while employer contributions are remitted directly by the employer. Contributions for earnings below the lower earnings limit (up to a maximum of KES 720) are credited to a Tier I account, while the balance of contributions for earnings between the lower and upper earnings limits (up to a maximum of KES 1,440) are credited to a Tier II account.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative is recent, published on November 19, 2025, and presents new data from the Retirement Benefits Authority (RBA) regarding pension funds’ bond and equity holdings up to June 2025. No evidence of recycled content or prior publication was found. The report is based on a press release from the RBA, which typically warrants a high freshness score.
Quotes check
Score:
10
Notes:
The narrative includes direct quotes attributed to the RBA, such as:
> “A significant boost came from the NSSF, where contributions rose sharply.”
These quotes are unique to this report, with no earlier matches found online, indicating original or exclusive content.
Source reliability
Score:
10
Notes:
The narrative originates from Business Daily Africa, a reputable news outlet in Kenya. The RBA, a government agency, is a credible source for the data presented.
Plausability check
Score:
10
Notes:
The claims about the 33% increase in pension funds’ bond and equity holdings are plausible and align with recent market trends. The narrative provides specific figures and attributions to the RBA, enhancing its credibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is recent, based on a press release from the RBA, and presents original quotes and data. The source is reputable, and the claims are plausible and supported by specific figures. No signs of disinformation or recycled content were found.