Pension assets defy pandemic to hit Ksh.1.4 trillion in 2020


Pension assets defy pandemic to hit Ksh.1.4 trillion in 2020
Retirement Benefits Authority C.E.O. Nzomo Mutuku addresses employers during the regulators pension scheme sensitization seminar on March 1, 2019.

In Summary

  • The growth from Ksh.1.3 trillion in 2019 was nevertheless slower than the 7.8 per cent expansion rate achieved previously.
  • Fund managers and approved issuers hold the majority of assets at Ksh.1.29 trillion including Ksh.209.8 billion held by the National Social Security Fund (NSSF).
  • GenAfrica Asset Managers held the bulk of assets by fund managers and approved issuers at Ksh.237 billion or an equivalent 18.5 per cent of assets, overtaking Sanlam Investments which held first place in 2019.

Retirement benefits/pension assets under management grew by 5.8 per cent last year to reach Ksh.1.4 trillion defying the impact of the COVID-19 pandemic.

The growth from Ksh.1.3 trillion in 2019 was nevertheless slower than the 7.8 per cent expansion rate achieved previously.

“The slow growth in the assets during the period can be attributed to the adverse effects of the COVID-19 pandemic which adversely affected the financial markets and the wider economy in the first half of 2020,” stated the Retirement Benefits Authority (RBA).

Fund managers and approved issuers hold the majority of assets at Ksh.1.29 trillion including Ksh.209.8 billion held by the National Social Security Fund (NSSF).

The schemes have extended their preference for government securities with the asset class accounting for 44.7 per cent of the total assets under management.

This is followed by immovable property at 18 per cent, investments in guaranteed funds at 16.5 per cent and equities at 15.6 per cent.

Offshore investments on the equities portfolio surged 92 per cent to Ksh.11.4 billion as schemes diversified holdings from risks posed by market volatility and a weakening shilling.

Investments in listed corporate bonds, unlisted bonds, cash, fixed deposits and real estate investment trusts nevertheless shrunk in the period.

GenAfrica Asset Managers held the bulk of assets by fund managers and approved issuers at Ksh.237 billion or an equivalent 18.5 per cent of assets, overtaking Sanlam Investments which held first place in 2019.

The RBA projects the growth of pension assets to remain depressed this year, stressed by evolving shocks from the COVID-19 pandemic.

“The retirement benefits assets are expected to grow in the first half of 2021 albeit at a slow pace due to the sluggish rebound of the stock market and the unpredictable effects of the third wave of Covid-19 disease,” the regulator added.

“The schemes are also expected to continue to invest in alternative assets given the broadening of the allowable investment categories and to take advantage of the public infrastructural projects under the big four agenda.”

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