Despite economic uncertainties, Kenyan pension schemes have witnessed substantial growth in 2024. A recent report by Zamara Consulting Actuaries reveals that the total assets under management by these schemes reached an impressive KSh 1.146 trillion. This represents a significant improvement from previous years, with many schemes outperforming inflation, a critical achievement in today’s volatile financial environment.
Key Highlights: According to the report, the number of participating schemes has slightly decreased from 423 in 2023 to 398 in 2024. However, the value of assets under management surged from KSh 1.059 trillion to KSh 1.146 trillion over the same period. The median performance of these schemes saw a remarkable increase, with a one-year median return of 13.9%, nearly double the 6.6% recorded in the previous year.
The improved performance was mainly driven by the robust bond and equity markets, despite the challenging political and economic environment. Conservative schemes, which dominate the market, managed to secure average returns across all periods, with a particularly strong performance in the fixed income asset class.
Market Performance: The equity market faced increased volatility, with major counters like Co-operative Bank, Equity Bank, and Safaricom witnessing dips. However, other counters such as EABL, KCB, and Absa recorded gains, contributing to the overall positive performance of the schemes.
The fixed income market also showed resilience, with the Central Bank of Kenya maintaining the Central Bank Rate at 13.0% in June 2024. This stability helped curb inflation and supported the Kenyan Shilling’s appreciation against the US Dollar, further bolstering the returns on fixed income investments.
Conclusion: Kenyan pension schemes are proving to be a robust investment vehicle, outperforming inflation and delivering solid returns to investors. As economic conditions continue to evolve, these schemes’ ability to adapt and thrive will be crucial in securing financial stability for Kenya’s future retirees.
