Kenya’s pension industry has posted a record growth in recent years, with total assets under management rising to Ksh2.21 trillion as of December 2024.
The increase marks a 27.94% increase compared to 2023. Additionally, the 2024 jump marks the sharpest rise since 2019.
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In 2019, total pension assets stood at Ksh1.3 trillion. This figure grew to Ksh1.4 trillion in 2020, and Ksh1.55 trillion in 2021.
However, the growth was modest in 2022 at Ksh1.58 trillion, but it picked up again in 2023 with assets valued at Ksh1.73 trillion.
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Pension Record Set After Hike in NSSF Deductions
According to the latest data from the Retirement Benefits Authority (RBA), the growth is largely attributed to increased mandatory retirement contributions to the National Social Security Fund (NSSF).
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The government implemented revised contribution rates to NSSF by salaried Kenyans in 2024 and 2025.
Under the new scheme, the lower contribution limit rose from Ksh7,000 to Ksh8,000, while the upper limit doubled from Ksh36,000 to Ksh72,000.
This adjustment increased monthly deductions from both employers and employees, resulting in a substantial rise in pension inflows.
Moreover, the National Social Security Fund (NSSF) Act, 2013 has undergone several amendments in recent years.
Some of the key changes included the introduction of increased contribution rates and the expansion of the contribution base to include workers in the informal sector, including the creation of a two-tier system for contributions.
Consequently, in February 2025, Kenyan employees and employers experienced changes in NSSF contributions, marking the third phase of the phased implementation of the NSSF Act of 2013.
Also Read: Non-Salaried Kenyans to Begin Paying NSSF Monthly Deductions
Deductions Being Made by Kenyans and Employers in 2025
NSSF contributions are structured into two tiers, Tier 1 and Tier 2, based on employee earnings. Each tier has a set limit, and both the employee and employer contribute 6% of the applicable amount.
Tier I contributions are paid directly to the National Social Security Fund (NSSF).
On the other hand, for Tier II contributions, employers have the option to either channel them into a private, contracted-out pension scheme or set up their own, which could potentially offer better returns for employees.
Regardless of the arrangement, the law requires a minimum contribution of 6% to the NSSF.
In 2023, the first Ksh6,000 of an employee’s monthly salary was allocated to Tier I, while up to Ksh18,000 was placed into Tier II. These limits increased in 2024, with Ksh7,000 going to Tier I and up to Ksh36,000 directed to Tier II.
The third phase of implementing the NSSF Act, 2013 which took effect in February 2025 revised the deductions upwards.
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