The retirement benefits sector has quietly become a remarkable growth story in the country’s financial system. In under 30 years, it has morphed from a fragmented unregulated sector to managing Sh2.8 trillion in assets, equivalent to 14.5 percent of the gross domestic product.

The first phase of the sector’s growth, marked through the enactment of the Retirement Benefits Act and the establishment of the Retirement Benefits Authority (RBA) in 2000, pivoted on regulation to supervise a sector that had operated under a patchwork of trust.

The second phase, unfolding through the 2010s, saw a product reconfiguration. The number of schemes increased exponentially, the investment guidelines matured in consistence with the law, and the public pensions space also began a structural shift from a defined benefits to a defined contributions arrangement.

The Public Service Superannuation Scheme Act particularly reorganised the administration of public pensions for hundreds of thousands of workers, ultimately leading to the operationalisation of the scheme in 2021.

This phase moved a measure of responsibility for retirement outcomes from the institution to the individual, from a passive beneficiary to an active player.

The sector has developed retirement products for nearly every category of worker and is currently rolling out retirement products to the informal sector through the Kenya National Entrepreneurs Savings Trust.

What has lagged in this sector shift is the human dimension, where millions of Kenyans for whom these retirement products were designed do not understand them, trust them and use them.

The next decade of pension sector growth will come from deliberate, sustained initiative of helping ordinary Kenyans understand, actively participate and trust their own retirement planning.

RBA’s statistical digest shows that the sector recorded an overall membership coverage ratio of 26.58 percent in 2025, equivalent to 7.71 million members out of an estimated working-age population of 29 million, growing from 12 percent coverage over the past two decades.

While this growth has been significant, it is still marginal as a percentage of the working-age population, and is highly concentrated among urban, male and wealthier, middle-aged Kenyans. In addition, adoption of pensions outside the National Social Security Fund remains marginal. The growth of the sector in the coming years will hinge on awareness, trust and habit.

With the global shift from defined benefit to defined contribution arrangements, members have inherited the decisions that employers once made on their behalf. Researchers argue that when members are engaged through commitments and well-structured nudges, participants and contribution rates rise substantially.

The import for Kenya is that while we have had our own shift toward direct contribution arrangements in the public and private sector, there is a greater role for members in enhancing their retirement adequacy. There is need for pension schemes to help members exercise that responsibility.

The common thread across guidance offered by bodies such as the OECD on pension communication is that members save more when they understand what they are saving for, they can track their progress and are engaged in a participatory approach in a language and channels that reflect their reality rather than the industry’s jargon.

Communicating in clear, accessible language, as well as digital self-service tools grants members access to their contributions and projected benefits. Building trust and sustained engagement with the members cannot replace the rigour of investments and pension administration, however, it complements the efforts to create a holistic experience for the member.

The pension sector has done the hard work of setting up broad legislation and harmonising supervision of the industry in the last three decades, but its next phase of growth must be written in everyday work of helping members engage with their retirement future.

This phase will also require a structural shift in how the industry’s success has been measured. Predominantly the key metric has been growth in assets under management, but a key metric of the next decade must be on the number of members who understand their pension, trust the pension scheme that is managing their savings and are actively contributing to their retirement security.

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