The Lower Eastern Times Opening The Third Eye
Kenya’s pension sector has experienced significant growth, with total assets under management reaching Ksh2.21 trillion by December 2024.
This marks a 27.94% increase from 2023, representing the largest rise since 2019.
In 2019, pension assets were valued at Ksh1.3 trillion, growing to Ksh1.4 trillion in 2020 and Ksh1.55 trillion in 2021. Growth slowed slightly in 2022, reaching Ksh1.58 trillion, but picked up again in 2023, with assets totaling Ksh1.73 trillion.
According to the Retirement Benefits Authority (RBA), the primary driver of this growth has been the rise in mandatory contributions to the National Social Security Fund (NSSF).
In 2024 and 2025, the government implemented revised NSSF contribution rates for salaried workers. The lower contribution limit increased from Ksh7,000 to Ksh8,000, while the upper limit doubled from Ksh36,000 to Ksh72,000. These changes led to higher monthly deductions from both employers and employees, significantly boosting pension inflows.
Furthermore, the NSSF Act of 2013 has been amended multiple times in recent years. These changes included raising contribution rates and expanding the contributor base to include informal sector workers, as well as introducing a two-tier contribution system.
In February 2025, the third phase of the NSSF Act’s implementation began, altering contribution rates for employees and employers.
In 2025, NSSF contributions are divided into two tiers based on earnings. Both employees and employers contribute 6% of the applicable salary amount to each tier. Tier I contributions go directly to the NSSF, while Tier II contributions can be directed to private pension schemes or employer-run schemes, which may offer better returns. The minimum legal contribution to NSSF is 6%.
In 2023, the first Ksh6,000 of an employee’s salary was allocated to Tier I, and up to Ksh18,000 went into Tier II. In 2024, these limits were raised to Ksh7,000 for Tier I and up to Ksh36,000 for Tier II. The February 2025 phase further revised the contribution rates.
