Pension fund managers are projecting strong double-digit returns in 2025, driven by gains in equities and fixed income markets.
The outlook was shared at the Enwealth Umbrella Fund Annual General Meeting for FY 2024, where ICEA Lion Asset Management and Kenindia Assurance Company expressed optimism that pension savers can expect continued growth in their retirement savings following a strong performance last year.
Commenting on the outlook for 2025, George Kamau, Portfolio Manager at ICEA Lion Asset Management, said: “Kenya’s economy has shown remarkable resilience. We expect GDP to expand by about 5.3% in 2025. In summary, 2025 has so far provided a supportive investment environment. With equities maintaining momentum and fixed income assets benefitting from lower rates, pension savers can look forward to continued strong returns.”
Kenya’s economy expanded by 4.7% in 2024, while inflation averaged at 4.5% in 2024, down from 7.7% in 2023, and is expected to remain within CBK’s target range. The shilling appreciated 17.4% against the US dollar in 2024—factors that translated to improved returns for pension funds.
The Enwealth Umbrella Fund in 2024 delivered a return of 15.05% to its members. The Segregated Fund, managed by ICEA Lion Asset Management, achieved a remarkable 19.25% net return, while the Guaranteed Fund, managed by Kenindia Assurance Company, also posted a solid 11% gain. The fund has consistently delivered competitive returns, averaging 11.03% since inception.
The fund also registered a 49% growth in assets under management, reaching KSh 1.056 billion, up from KSh 724 million in 2023. The Enwealth Umbrella Fund is approved by the Retirement Benefits Authority (RBA) as a contracting-out scheme to receive NSSF Tier II contributions.
In 2024, the fund received KSh 7.2 million in Tier II contributions, up from KSh 1.8 million in 2023, demonstrating increasing confidence from employers and employees.
On a broader industry perspective, the Retirement Benefits Authority (RBA) highlighted the steady growth of the sector. According to Anthony Chumo, representing the RBA, pension assets in Kenya now stand at KSh 2.25 trillion, representing 13% of GDP. There are 1,032 registered pension schemes in the country, of which 197 schemes (18.4%) manage assets above KSh 1 billion.
“While the sector currently serves 7.2 million members—4.49 million being active contributors, the pension coverage is still around 26% of the working population, underscoring the need to expand participation. The coverage is expected to rise with the ongoing implementation of the enhanced NSSF contribution framework, which is gradually bringing more workers into formal retirement savings,” Mr Chumo noted.
The Central Bank of Kenya projects GDP growth to accelerate to 5.4% in 2025. Fund managers believe this growth outlook, combined with sector reforms and favorable investment conditions, will sustain double-digit pension returns and strengthen the retirement security of Kenyan workers.
