Millions of Kenyans could face financial difficulties in retirement due to inadequate pension benefits despite relatively strong governance of the country’s retirement savings sector, a new global study has found.
The 2026 Marsh CFA Institute Global Pension Index gave Kenya an overall score of 53.1 out of 100, placing it in the C-grade category among the 55 retirement income systems assessed worldwide.
The report was released in October and marks Kenya’s first inclusion in the global index.
Marsh CFA Institute Global Pension Index’s study evaluated retirement systems using three key measures: adequacy, sustainability and integrity.
Pension Benefits Concerns
Adequacy, which examines whether retirees receive sufficient income to maintain a reasonable standard of living, accounted for 40 per cent of the overall score.
Kenya’s weakest performance came in this category, where it scored just 38.9 points out of 100 and received a D grade.
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The rating suggests that while the country’s pension system has some desirable features, major weaknesses remain that could affect the financial wellbeing of retirees.
By contrast, Kenya scored 76.0 points for integrity, earning a B+ grade.
This measure assesses factors such as regulation, governance, communication and member protection.
The sustainability score stood at 53.0, placing the country in the C-grade category.
The report notes that no retirement income system can be judged on benefit levels alone, but it emphasizes that adequate retirement income remains one of the most important indicators of pension system effectiveness.
According to the index, strong retirement systems typically combine broad pension coverage, meaningful benefits and long-term financial sustainability. Kenya’s low adequacy score points to concerns about whether many workers will have enough income after leaving the workforce.
The study further highlights that retirement systems around the world are facing growing pressure from demographic changes, including longer life expectancy and aging populations.
People are increasingly spending more years in retirement, requiring pension savings to last much longer than in previous generations. The report notes that retirement can now last 20, 30 or even 40 years in some cases, increasing the importance of adequate pension benefits.
Unlike many developed economies struggling with falling birth rates, Kenya remains one of the youngest populations in the study.
The report shows Kenya’s fertility rate stood at 3.2 children per woman in 2023, among the highest recorded in the index. Forty-three of the 55 retirement systems assessed had fertility rates below the replacement level of 2.1 children per woman.
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The study also found that life expectancy at age 65 in Kenya has increased by 2.9 years since 1950, meaning retirees are living longer and placing greater demands on retirement savings and pension systems.
Calls for Reform
The report recommends several measures that could strengthen retirement systems, including increasing pension coverage among employees and self-employed workers, reducing early withdrawals from retirement savings, improving governance and transparency, encouraging higher levels of private savings and promoting longer workforce participation.
It also stresses the importance of ensuring pension benefits can provide sufficient income throughout retirement rather than only at the point when workers leave employment.
Among African countries assessed in the 2026 Marsh CFA Institute Global Pension Index, South Africa was the highest-ranked with a score of 72.0 (B grade), followed by Botswana at 64.9 (C+ grade), Namibia at 61.8 (C+ grade), Morocco at 57.5 (C grade), Kenya at 53.1 (C grade) and Nigeria at 42.4 (D grade).
Kenya outperformed only Nigeria but trailed all other African countries in the index, with its weakest performance coming in pension adequacy, which measures whether retirees receive sufficient income after leaving work.
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