Kenya’s growing pool of retirement savings could play a larger role in supporting economic activity if pension funds expand their investment choices beyond the usual government securities, Health Cabinet Secretary Aden Duale has said.
In a message posted on his X account on March 9, 2026, Duale said the country’s pension and collective investment funds, now estimated at about Sh2.81 trillion, form a strong base of local capital that can help drive development while safeguarding the future of retirees.
He pointed out that the retirement savings sector has grown steadily in recent years, with notable expansion recorded in 2023. Despite this growth, he observed that most pension assets are still mainly invested in Treasury bills and government bonds, a trend he believes should change to unlock greater economic value.
“Traditional investments are insufficient,” Duale said, calling for exploration of a wider range of investment opportunities that could improve returns and boost economic activity.
According to the Cabinet Secretary, better use of pension savings could also contribute to job creation and support economic prospects for younger generations, including families whose members contribute to pension schemes.
“Kenya’s domestic capital holds immense potential, with pension and other collective funds totalling Ksh 2.81 trillion, patient capital that can support national development while securing the future of pensioners,” he said.
Duale’s remarks came shortly after President William Ruto approved a new law governing retirement benefits for judges. The Judges’ Retirement Benefits Act, signed on March 9, 2026, establishes a clear structure for retirement benefits for members of the superior courts.
Under the law, judges who are already serving will remain under the defined benefits pension system. Those appointed in the future will join a contributory retirement scheme where judges will contribute 7.5 per cent while the government will contribute 15 per cent.
The Act also sets out additional support measures for judges after retirement. These include medical cover and other privileges aimed at ensuring their welfare once they leave office.
Meanwhile, the Retirement Benefits Authority is considering new changes intended to widen access to pension schemes and offer contributors more flexibility.
One of the proposals under review is the introduction of a two-pot pension model. Under this arrangement, retirement contributions would be divided into two portions, with one portion preserved for retirement while the other could be accessed earlier for urgent needs.
The accessible portion could help contributors deal with expenses such as medical bills, school fees or capital for small businesses.
The proposal is expected to be part of discussions tied to the FY 2026/2027 Budget Policy Statement and is aimed at encouraging more Kenyans, especially those working in the informal sector, to participate in formal retirement savings plans.
