Kenya’s Thriving Pension Industry Faces Concentration Risks, Unpaid Contributions
Kenya’s pension industry closed 2024 on a high, with retirement savings hitting Ksh 2.23 trillion from KSh 1.84 trillion in 2023..
✨ Key Highlights
Kenya's pension industry closed 2024 with an impressive Ksh 2.23 trillion in retirement savings, an increase from Ksh 1.84 trillion in 2023. Despite this growth, the industry faces significant challenges including concentration risks, specifically overexposure to government securities, and a surge in unpaid contributions.
- Nearly half (48.5%) of the industry’s assets are invested in government securities.
- Charles Machira, CEO of the Retirement Benefits Authority (RBA), highlighted the need for diversification.
- Unpaid contributions, money deducted but not remitted to pension schemes, have more than doubled since 2021, reaching Ksh 69.4 billion.
- Operating costs for pension schemes jumped by 15% to Ksh 41.9 billion.
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Kenyan Institutions Face Financial Shortfalls, Debt, and Audit Over Sh15bn Gap - September 2025
The Metropolitan National Sacco Society has approved a forensic audit after a Sh15 billion loan book asset was revealed to be untraceable, alongside a negative equity position. This action addresses concerns about the Sacco's financial stability. At a national level, Kenya is facing a severe fiscal crisis, with 68% of ordinary tax revenue being allocated to debt servicing, which hinders critical public services. Similarly, the Kenya Wildlife Service (KWS) is seeking to address a Sh12 billion annual conservation funding deficit by proposing an increase in park entry fees. In a related issue, Kenya's pension industry, with Ksh 2.23 trillion in savings, faces significant challenges including overexposure to government securities and a surge in unpaid contributions.
