Kenyans have saved an additional Sh220 billion in the National Social Security Fund (NSSF) since the start of higher deductions in February 2023, the fund estimates show.
The higher contributions that were set off by the implementation of the NSSF Act of 2013 have pushed the assets held in the fund close to the Sh600 billion mark as the State-backed national pension scheme grows faster than initially expected.
“Within the short period of implementation, about two years, we have saved an additional Sh220 billion,” NSSF Managing Trustee David Koros.
“In our strategic plan, we had planned that we would hit Sh600 billion in assets by June 2026. However, by June this year, we will be at the Sh600 billion mark.”
The implementation of the NSSF Act, 2013 entered its third phase or year in February when member contributions doubled from a maximum of Sh2,160 to Sh4,320.
Member contributions to the NSSF jumped from a flat rate of Sh200 per month to Sh1,080 in February 2023 before rising to Sh2,160 in February 2024.
The NSSF contributions are expected to rise further in February 2026 to Sh6,480.
From 2027, contributions to the fund will be determined by the lower and upper earnings limits gazetted by the government.
According to data from the Retirement Benefits Authority (RBA), the total net assets held by the NSSF stood at Sh476.8 billion as at 31 December, an increase of Sh74.8 billion in the second half of last year.
About Sh424.6 billion of the assets were externally managed by three fund managers, including Gen Africa Asset Managers, African Alliance Kenya Investment Bank and Co-op Trust.
Internally managed funds, meanwhile, amounted to Sh52.2 billion in the period.
“The growth in total funds under management by NSSF, both internally and externally, has been driven by growth in member contributions over the last few years,” the RBA said.
“Contributions to the NSSF have been on a steady growth over the last three years. The increase in contributions is attributed to the continued implementation of the NSSF Act of 2013.”
The majority of NSSF assets, or 67.4 percent are invested in government securities, while listed shares stood at 14.28 percent.
The fund is also invested in other asset classes, including immovable property, fixed deposits, unlisted shares, corporate bonds, cash and demand deposits.
The growth in NSSF assets helped the pension industry assets hit Sh2.25 trillion, up from Sh1.72 trillion a year earlier.
Pension assets also benefited from increased investment income as interest rates soared, especially in the first half of 2024.
About 92 percent of pension assets remain in four traditional asset classes -- government securities, guaranteed funds, quoted equities and immovable properties.
“Traditional investment assets have long been favoured by pension schemes due to their stability and predictable returns, and they continue to constitute the bulk of scheme investments,” RBA said.
