MOMBASA County— Jan 23, 2026—Kenya’s pension funds face a critical year in 2026 as trustees grapple with investment risk, governance demands and slower growth in new contributors, industry leaders say
Speaking at a pensions conference in Mombasa, stakeholders said recent regulatory and policy changes have shifted the sector into an implementation phase, raising pressure on trustees to protect member savings while sustaining returns.
Pension coverage stood at 26.5 per cent in 2024, up slightly from 25.6 per cent in 2023, but growth in formal employment has slowed and reminded funds that future gains may depend more on governance and investment decisions than on expanding enrolment.
Minet Kenya, Pensions General Manager, Daniel Mainga said many pension funds remain heavily exposed to government securities, increasing vulnerability to interest rate and inflation risks.
“While government bonds provide stability, over-concentration exposes funds to inflation and rate volatility,” Mainga said, adding that diversification into alternative and ESG-aligned assets could help balance risk and long-term growth.
The two-day conference, which opened on January 22, brought together trustees, regulators and financial experts to assess how funds should operationalise reforms while strengthening oversight and transparency.
Retirement Benefits Authority (RBA) Chief Executive Officer Charles Machira said governance will be under closer scrutiny in 2026 as funds adjust to expanded tax incentives introduced through the Finance Acts of 2024 and 2025.
“The incentives provide an opportunity to deepen retirement savings, but only if they are supported by strong governance structures that protect members’ interests,” Machira said.
Participants also reviewed the implementation of the National Social Security Fund (NSSF) Act, which replaced the long-standing Sh200 flat contribution with a graduated, salary-based system matched by employers.
The changes are expected to significantly affect contribution levels, employer costs and retirement outcomes from 2026 onwards.
Speakers warned that a tight labour market, rising member expectations and increased regulatory oversight will intensify pressure on pension trustees, making 2026 a decisive year for the sector’s stability and long-term sustainability.
