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Kenyans’ Pension Contributions Nearly Double Since 2022

News

By Lisbeth Micheni, Kenya

Kenyans have significantly increased their contributions to pension schemes over the past three years, with figures nearly doubling since 2022, according to data from the Retirement Benefits Authority (RBA).

RBA statistics indicate that total pension contributions rose from Ksh.62.73 billion in the first half of 2022 to Ksh.118.80 billion by the end of 2024.

Contributions stood at Ksh.70.26 billion in the second half of 2022, climbed to Ksh.83.14 billion in the first half of 2023, and further increased to Ksh.105.65 billion by the end of that year.

In 2024, Kenyans contributed Ksh.116.10 billion in the first six months, followed by Ksh.118.80 billion in the latter half of the year.

Additionally, contributions to Post-Retirement Medical Funds (PRMFs) designed to help retirees save for Healthcare have surged dramatically since September 2024.

The RBA reports that PRMF contributions grew from Ksh.51.51 million in the latter half of 2023 to Ksh.76.02 million in the first half of 2024.

By the end of 2024, this figure had soared to Ksh.268.36 million, largely driven by a Treasury directive enabling pension schemes and employers to establish medical funds for employees.

Revisions to the National Social Security Fund (NSSF) Act, 2013, have also played a role in the increased pension savings.

These amendments introduced a tiered contribution system, replacing the previous flat-rate model. Tier I contributions apply to those earning up to Ksh.7,000 per month, while Tier II applies to higher earnings.

Employers can remit Tier II contributions to either NSSF or an approved pension scheme. Employees contribute 6% of their gross monthly salary, with an equal match from employers.

In 2024, the highest allowable deduction stood at Ksh.2,160 per employee, with a matching employer contribution, totaling Ksh.4,320.

However, as of February 2025, this cap was raised to Ksh.4,320 per employee, bringing the combined contribution to Ksh.8,640 per month.