New NSSF Rates Raise Pension Fund By 127Bn

The introduction of higher mandatory contributions to the National Social Security Fund (NSSF) and exchange gains on overseas investments both contributed to the rise of pension fund assets, which increased by Sh127 billion in the first half of this year.

New investments in Real Estate Investment Trusts (Reits), like as the Sh6.92 billion Laptrust Imara Investment Reit (I-Reit), which was listed on the Nairobi Securities Exchange (NSE) in March, also contributed to the 8.1 percent growth to Sh1.704 trillion.

The data from the Retirement Benefits Authority (RBA) reveals that during the period, the value of significant asset classes including government securities and fixed deposits increased as well. This was partially due to money being reallocated from listed shares, which continued to suffer.

The increase in total assets under management this year contrasts with the 2.1% decline (to Sh1.515 trillion) in the first half of 2022, which was brought on by fair value losses on real estate, stocks, and bonds issued by the government.

“The growth of the assets during the period is partly attributed to the enhanced contributions to the mandatory scheme, NSSF, which began in earnest in February 2023 following the Court of Appeal ruling and the improved performance of the offshore assets arising from the exchange rate fluctuations,” said the RBA.

“The schemes continued to invest heavily in government securities which accounted for 47.79 percent of the total assets under management. This was followed by guaranteed funds which accounted for 19.19 percent.”

The amount of investments held by the State-owned fund totaled Sh308.26 billion in June as a result of the execution of the increased contributions for the NSSF, an increase of Sh12.61 billion.

Out of this asset base, the fund manages Sh46.6 billion on its own, while the rest Sh261.65 billion is under the control of six private fund managers, with the highest holding, Sh58.9 billion, owned by Gen Africa Asset Managers.