NSSF Posts Record 17% Return as Kenya Pushes Toward Ksh1 Trillion Asset Target

Key facts

• NSSF declared a 17% return on members' savings for 2024/2025, up from 11% the previous year.
• President William Ruto set a target of Ksh1 trillion in assets for NSSF by 2027.
• Member contributions rose 35% to Ksh83.97 billion in the year to June 2025.
• Active contributors reached 3.6 million, an 8% increase from 3.3 million.
• Total member funds stood at Ksh572 billion, a 43% increase from Ksh400 billion.
• Investment assets grew 43% to Ksh558 billion in 2025, up from Ksh389 billion.
• Net investment income jumped 152% to Ksh105.3 billion in 2025.
• New contribution rates effective February 2026: Lower Earnings Limit at Sh9,000, Upper Earnings Limit at Sh108,000.

Record Returns and Rising Contributions

The National Social Security Fund (NSSF) has reported its strongest performance to date, declaring a record 17% return on members' savings for the 2024/2025 financial year at its 8th Annual General Meeting in Nairobi on 6th February 2026. This marks a significant jump from the 11% interest credited the previous year and signals a turnaround for the state-run pension fund. Member contributions surged 35% in the year to June 2025, reaching Ksh83.97 billion, up from Ksh62.29 billion the prior year. The growth reflects President William Ruto's push to raise national savings, with a target of Ksh1 trillion in assets for NSSF by 2027. Active members rose 8% to 3.6 million contributors, from 3.3 million registered the year before.

President Ruto's Ksh1 Trillion Target

President William Ruto has set an ambitious target of Ksh1 trillion in assets for NSSF by 2027, driving a transformation of the fund. Total member funds currently stand at Ksh572 billion, a 43% increase from Ksh400 billion recorded in June 2024. This leaves the fund Ksh428 billion short of the president's goal. Investment assets grew by 43% to Ksh558 billion in 2025, up from Ksh389 billion in 2024, a Ksh168 billion jump. The fund delivered a 22% return on investment in 2025, up from 12.02% in June 2024, an 83% surge in performance. Net investment income soared 152% to Ksh105.3 billion, from Ksh41.7 billion in the previous financial year.

New Contribution Rates Take Effect

From February 2026, Kenyans face higher salary deductions as new NSSF contribution rates came into effect, according to a tax alert by PricewaterhouseCoopers (PwC). The Lower Earnings Limit (LEL) increased to Sh9,000, while the Upper Earnings Limit (UEL) rose to Sh108,000, aimed at boosting long-term retirement savings. NSSF contributions remain at 12% of pensionable earnings, shared equally between employee and employer. Contributions on earnings up to Sh9,000 go to Tier I, with employees contributing Sh540 matched by employers, totaling Sh1,080. Earnings above Sh9,000 up to Sh108,000 are allocated to Tier II, where employees contribute Sh5,950 matched by employers, totaling Sh11,900. Employers have been urged to adjust payroll systems to align with the updated thresholds, marking the final phase of the four-year transition under the NSSF Act of 2013.

Mixed Impact on Members

For ordinary Kenyans, the fund's strong performance translates into larger retirement savings and potentially higher payouts. However, member benefits dropped by 10% to Ksh8.74 billion in June 2025, from Ksh9.71 billion disbursed in June 2024. The decline is attributed to fewer applications, with applications falling by 11,893 or 11% in 2025 compared with the previous year. PwC noted that while mandatory contributions will rise, boosting long-term savings, the changes will also reduce monthly take-home pay. NSSF contributions remain tax-deductible, with employees eligible for tax relief on pension contributions of up to Sh30,000 per month. Employers may still channel Tier II contributions to registered private pension schemes, provided they comply with Retirement Benefits Authority (RBA) regulations and notify NSSF at least 60 days in advance.

Low Coverage Despite Growth

Despite the impressive numbers, pension coverage remains alarmingly low. Only 10.6% to 25% of Kenya's working-age population currently accesses pension services such as NSSF. Roughly 83% to 89% of Kenyans still lack formal, regular pension coverage, exposing millions to poverty risks in old age. By late 2024, NSSF revealed approximately 7.5 million registered members, but active contributors were around 3.7 million. The gap between registration and active participation underscores the challenge of converting enrollment into sustained contributions.

Outlook and Challenges

President Ruto's target of Ksh1 trillion in assets by 2027 remains a stretch, requiring continued growth in contributions and investment returns. The fund is Ksh428 billion short, meaning it must nearly double its current assets in less than two years. The new contribution rates will boost inflows, but they also reduce disposable income for workers already grappling with a high cost of living. The drop in member benefits and applications suggests that many Kenyans may be withdrawing less or deferring access, possibly due to economic pressures or improved confidence in the fund. However, the low coverage rate indicates that the vast majority of the workforce remains outside the formal pension system, a structural issue that no single fund can solve alone.

A Transformative Moment for Kenya's Pension System

The NSSF's record performance and the government's aggressive targets mark a transformative moment for Kenya's pension landscape. The fund is becoming a more significant player in the country's financial system, with investment assets now exceeding Ksh558 billion. Yet the challenge of extending coverage to the informal sector, where most Kenyans work, persists. As the final phase of the NSSF Act's transition takes effect, the fund's ability to balance higher contributions with member benefits will be closely watched. The coming years will test whether the push for scale can translate into broad-based retirement security for all Kenyans.

The bottom line

• NSSF declared a record 17% return for 2024/2025, up from 11%, and investment income surged 152% to Ksh105.3 billion.
• President Ruto targets Ksh1 trillion in assets by 2027; current assets are Ksh572 billion, leaving a Ksh428 billion gap.
• New contribution rates effective February 2026 raise the Upper Earnings Limit to Sh108,000, increasing deductions for higher earners.
• Active contributors rose to 3.6 million, but only 10.6-25% of working-age Kenyans have pension coverage.
• Member benefits dropped 10% to Ksh8.74 billion, with applications falling 11%.
• Employers can divert Tier II contributions to private schemes with RBA approval and 60-day NSSF notice.