RBA Statistical Digest 2024: Kenyan Pension Industry Growing and resilient
Kenya’s pension sector demonstrated significant growth and resilience in 2024, with the total value of pension funds increasing substantially. According to the Retirement Benefit Authority (RBA) 2024 Statistical Digest, the industry is not only expanding in value but also in membership and strategic focus, reflecting a robust and evolving financial landscape.
Key Financial Highlights
According to the RBA Statistical Digest, the total value of pension funds surged to Ksh 2.23 trillion in December 2024, a notable increase from Ksh 1.84 trillion in 2023. This 17.5% growth is a direct result of strong investment performance and rising member contributions. The data shows that a few large schemes are leading this growth. Schemes with assets exceeding Ksh 10 billion now manage more than 62% of the total industry assets. This concentration in larger funds indicates their financial stability and ability to manage long-term obligations through diversified investment strategies.
Membership and Coverage Expansion
Membership in pension schemes also saw a healthy increase, reaching 7.53 million in 2024 (excluding members of occupational schemes). This expansion can be attributed to several factors:
- Intensified public awareness campaigns.
- Targeted outreach programs.
- Policy changes, including the implementation of the NSSF Act.
Despite this progress, a significant portion of the workforce, particularly those in the informal sector, remains outside the pension system. This highlights a critical need for new, flexible pension solutions designed to meet the unique needs of these workers.
Investment Trends and Future Strategy
Kenyan Government Securities remained the top investment choice for pension schemes, making up 48.5% of total assets. While these securities offer stability and predictable returns, their high concentration presents a potential risk to portfolio performance. This reinforces the need for schemes to diversify their portfolios by exploring alternative investments. The Retirement Benefits Authority encourages diversification into:
- Infrastructure projects
- Real estate
- Offshore investments
The Authority says it is committed to protecting members’ interests and ensuring the long-term sustainability of the pension sector. The Authority, in collaboration with stakeholders, will continue to address coverage gaps, manage emerging risks, and strengthen the sector’s contribution to Kenya’s national development. Also read: Taxing Retirement Benefits in Kenya: How Tax Laws (Amendment) Act 2024 puts more money in your pocket
