Pension savings soar as NSSF collections jump to Sh59 billion
Overall pension inflows across the country grew 29 per cent to Sh263.4 billion from Sh204.9 billion in 2023.
Pension contributions to the National Social Security Fund (NSSF) surged in 2024, more than doubling to Sh59.1 billion as higher mandatory deductions for workers and employers took full effect, according to data from the Retirement Benefits Authority (RBA).
The jump in contributions reflects the second phase of the graduated contribution system, which replaced the decades-old flat Sh200 rate.
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NSSF’s portion of total pension savings rose to 22.4 per cent from 10.9 per cent, showing the statutory fund is gaining ground over private retirement schemes.
“Total contributions rose significantly in 2024, largely driven by increased employer and member contributions following the implementation of enhanced NSSF rates,” said RBA.
Overall pension inflows across the country grew 29 per cent to Sh263.4 billion from Sh204.9 billion in 2023.
The growth pushed NSSF-managed funds to Sh402 billion, equivalent to 18 per cent of the industry’s total fund value of Sh2.2 trillion.
Occupational pension schemes continue to dominate, holding Sh1.44 trillion in assets.
Under the new system, mandatory contributions are based on salary bands, with the maximum monthly payment rising from Sh2,160 in 2023 for those earning up to Sh18,000 to Sh4,320 in 2024.
This has helped channel more resources into the statutory fund.
Employers contributed Sh145.4 billion during the year, while employees’ contributions totalled Sh117 billion. Some employers made extra payments worth Sh8.7 billion, showing support for their staff’s retirement savings.
Individual voluntary contributions dropped slightly to Sh1 billion.
“While normal contributions from both parties showed strong growth, additional voluntary contributions and medical fund contributions declined, suggesting a shift in focus toward mandatory contributions,” noted RBA.
Challenges remain, however, with unremitted contributions rising by 12 per cent to Sh69.4 billion from Sh61.7 billion.
Most delays were short-term, but Sh55.4 billion of the unpaid funds had been overdue for more than 30 days, highlighting cash flow difficulties faced by some employers.
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