2026 Seen As Pivotal Year For Pension Funds As Trustees Urged To Focus On Growth

Pension trustees have been advised that 2026 will be a defining year for Kenya’s pensions sector, as funds continue to balance investment growth, regulatory compliance and member protection amid expanding contribution obligations.

The guidance was issued at the 10^th Minet Kenya Annual Pensions Conference in Mombasa, where industry leaders said the sector is entering an execution phase following sweeping regulatory and policy changes introduced over the past two years.

Although pension coverage rose to 26.5 per cent in 2024 from 25.6 per cent in 2023, the outlook for 2026 remains uncertain, with formal employment growth lagging and new pension contributors having declined sharply. Trustees were told that sustaining coverage and returns will depend less on enrollment growth and more on how effectively funds manage risk, governance and investment diversification.

Speaking at the conference, Daniel Mainga, General Manager, Minet Kenya Pensions, said pension funds must reassess portfolios that remain heavily concentrated in government securities as they enter 2026.

“While government bonds provide stability, the heavy concentration of pension fund assets in these securities exposes them to interest rate and inflation risks,” Mainga said.

“This makes it essential for trustees to diversify portfolios by incorporating alternative assets and Environmental, Social, and Governance (ESG)-compliant investments, balancing risk mitigation with long-term growth to safeguard members’ retirement savings”

The two-day conference, which began on January 22, 2026, brought together trustees, regulators and financial experts under the theme ‘The Next Frontier: Innovation, Insight and Intelligent Governance’. Discussions centred on how pension funds should operationalise reforms while strengthening oversight, transparency and data-driven decision-making.

Retirement Benefits Authority (RBA) Chief Executive Officer Charles Machira said 2026 marks a critical test of governance as funds adjust to expanded tax incentives and the full rollout of regulatory reforms.

“The recent tax incentives under the Finance Acts of 2024 and 2025 present an important opportunity to deepen retirement savings,” he said. “However, they must be supported by sound governance frameworks to ensure members’ interests are protected and value is sustained over the long term”.

Participants also examined the continued implementation of the NSSF Act, which has shifted contributions from a flat Sh200 rate to a graduated, salary-based structure matched by employers, a change expected to significantly influence contribution levels, employer costs and retirement outcomes in 2026 and beyond.

As pension funds navigate a challenging labour market, tighter scrutiny and rising member expectations, speakers agreed that 2026 will be a make-or-break year, demanding smarter investment strategies, disciplined governance and a sharper focus on long-term sustainability.

Read Also: Low-income Workers Face Old Age Poverty As Pension Savings Remain Low