Strong Equity Performance Keeps Retirement Scheme Returns in Double Digits

Kenya’s retirement schemes closed 2025 with solid double-digit annual returns, despite a slowdown in the final quarter, according to the latest Zamara Consulting Actuaries Schemes Survey (Z-CASS). The survey covered 406 retirement schemes managing KSh 1.51 trillion in assets. Quarterly returns positive but eased from previous quarter Retirement schemes posted a median return of 2.5% in the fourth quarter of 2025, down from 7.1% in Q3, reflecting positive but weaker performance in both fixed income and equities. Equity returns slowed to 8.3%, from a whopping 19.4% in September Fixed income returns dropped to 1.6%, from 5.2% Strong equities drive full-year gains Despite the softer quarter, full-year performance remained robust. The median one-year return for retirement schemes stood at 25.3%, slightly lower than 29.3% in 2024, but still firmly in double-digit territory. Gains were driven largely by quoted equities, which delivered a standout median return of a colossal 64.3% in 2025. Aggressive schemes continue to outperform Schemes with higher exposure to equities and offshore assets delivered the strongest long-term results across all time periods measured. Aggressive schemes recorded median returns of 28.1% over one year, 19.0% over three years, and 13.7% over five years, outperforming more conservative portfolios. Twelve schemes qualified as aggressive during the period, reflecting a gradual shift toward higher-risk allocations amid the ongoing bull run at the Nairobi Securities Exchange. Offshore assets lag amid currency stability Offshore investments delivered the lowest median returns, at 1.2% for the quarter, however continued to deliver strong value at 15.1% for the year. Performance remained relatively stable due to the Kenya shilling’s stability against the US dollar, though offshore assets remain exposed to global geopolitical risks. Long-term returns comfortably beat inflation The most important thing is that over longer horizons, pension schemes continued to preserve and grow real value. Median annualized returns stood at 18.6% over three years and 13.6% over five years, comfortably above inflation. Inflation averaged 4.5% over one year, 4.7% over three years, and 5.8% over five years as at December 2025.