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Pension schemes mint record Sh16bn from bonds, shares sale
The Retirement Benefit Authority data shows that gains on the disposal of government securities stood at Sh11.3 billion while profits from share sales by pension schemes were Sh5.3 billion.
Pension schemes minted a record Sh16.6 billion in gains from disposal of government bonds and listed stocks in 2025, cashing in on the higher prices of the assets.
The gains are the highest in at least five years and came against the backdrop of higher prices of bonds in the secondary market and shares on the Nairobi Securities Exchange (NSE).
Gains made from the disposal of quoted shares were backed by higher corporate earnings and improved macroeconomic conditions which supported the rise of stocks while gains from the sale of government securities were anchored on relatively lower interest rates.
The price of bonds in the secondary market usually has an inverse relationship with interest rates where prices soar as rates drop, allowing investors to realise profits from sale of bonds with higher coupons (interest rates). Gains on the disposal of government securities stood at Sh11.3 billion while profits from share sales by pension schemes were Sh5.3 billion, according to data from the Retirement Benefits Authority (RBA).
Profits from the sale of government securities and quoted shares in 2024 were lower at Sh2.05 billion and Sh986.5 million respectively.
The gains from disposal of State securities and quoted shares in 2025 were enough to more than offset Sh456.9 million in losses from disposal of real estate properties in the year.
“The increase was primarily driven by substantial gains from disposal of Kenya government securities and quoted shares, reflecting favourable movements in both the fixed-income and equity markets during the year,” the RBA said.
“However, the ‘other investments’ category recorded a net loss of Sh456.9 million, partially offsetting the overall gains realised in 2025. The category consists mostly of disposal in immovable property by schemes.”
The stock market offered investors the highest returns for a second year running in 2025, beating property, offshore investments and fixed income assets whose returns dipped due to falling interest rates.
The sustained growth was backed by low inflation, lower interest rates and a stable exchange rate, creating a favourable environment for growth in corporate earnings and participation by foreign investors.
NSE market capitalisation rose by 51.8 percent in the period as investor wealth rose by a record Sh1 trillion, doubling paper gains from 2024.
High-yielding Treasury bonds traded at a premium on the same bourse as interest rates on new and reopened securities declined to between 11.67 percent and 14.63 percent.
Tax-free infrastructure bonds offered the highest premium as investors raised their appetite for the existing high-yielding bonds with interest rates on new issuances in the primary market falling. Pension schemes doubled down on the same asset classes even as they made some disposal in a strategic portfolio rebalancing.
Investments in government securities by schemes rose to Sh1.38 trillion from Sh1.08 trillion in 2024 and made up 50.98 percent of the vehicles’ assets. Allocation to quoted securities rose to Sh277.4 billion from Sh189 billion to represent 10.2 percent of schemes’ assets.
Pension schemes, however, held more assets in guaranteed funds at Sh560.7 billion. Allocation to immovable property stood at Sh247.2 billion.
The schemes' other major asset classes were fixed and time deposits, and offshore investments.
Schemes also invested in minor asset classes with allocations of under one percent to each category including cash and demand deposits, property unit trusts, unquoted equities, commercial and corporate bonds and private equity and venture capital.
“Compared to 2024, most asset classes recorded growth, with notable increases in Kenya government securities, guaranteed funds, quoted equities, and offshore investments, largely driven by improved market performance, attractive returns, and continued portfolio diversification by retirement benefits schemes,” RBA added.
Total assets under management by pension schemes rose by 26.84 percent to Sh2.82 trillion as of December 2025, driven by growth in contributions and investment income.
Total contributions by both employers and employees tallied to Sh309.26 billion while investment income stood at Sh274.81 billion.
