If you’ve been keeping an eye on Kenya’s pension landscape, the latest Zamara Consulting Actuaries Schemes Survey (Z-CASS) for the period ending June 2025 is nothing short of exhilarating. We’re talking about pension schemes delivering their best performance in years, with a median 1-year return of 30.0%, that’s a whopping 26% above inflation! Covering 407 schemes managing KSh 1.3 trillion in assets, this report highlights how smart investing in local equities and government bonds is paying off big time. Let’s dive into the details and what it means for you.
Outpacing Inflation
For the first time in recent memory, Kenyan pension schemes aren’t just keeping up with inflation, they’re leaving it in the dust. The 12-month median return hit 30.0%, driven by stellar performances from local equities (up 50.7%) and government bonds (up 27.8%). This marks a dramatic turnaround from the tougher times in 2022 and 2023, when returns lagged behind inflation rates of 7.9%.
As Sundeep Raichura, Group CEO of Zamara, puts it: “This year’s performance is a reminder that disciplined investing, diversification, and a long-term perspective can deliver real value to pension members.” Couldn’t agree more—it’s a win for everyone saving for their golden years.
To put this in perspective, here’s a quick comparison of median pension scheme returns against inflation over key periods:
| Period Ending June 2025 | Median Return | Inflation Rate | Real Return |
| 1-Year | 30.0% | 3.8% | 26.2% |
| 3-Year (Annualized**) | 16.4% | 5.4% | 11.0% |
| 5-Year (Annualized**) | 13.0% | 6.1% | 6.9% |
These real returns mean your pension pot is growing in actual purchasing power, not just nominally. Over five years, that’s like turning every KSh 100 into about KSh 185 on average, impressive stuff!
Offshore Investments Shine Long-Term
While local assets stole the show in the short term, offshore investments proved their worth over longer horizons. They topped the charts with 22.2% annualized returns over three years and 13.9% over five years, outshining local equities, bonds, and even major global benchmarks. This underscores the magic of diversification, especially amid currency fluctuations and geopolitical jitters.
That said, not everyone’s on board yet. Only 190 schemes in the survey had offshore exposure, with an average allocation of just 2%. If you’re in a scheme without it, this might be the nudge to explore more global options—there’s clear potential for boosting long-term growth.
Conservative Strategies Win the Marathon
In a twist, it’s the cautious players who came out on top over the long haul. Conservative schemes—those with over 80% in government bonds, posted the strongest 5-year annualized return at 13.1%. This equates to roughly 85% total growth over five years, fueled by the steady reliability of bonds.
Moderate and aggressive schemes dazzled in the quarter and year with higher-risk bets paying off, but for sustained performance, conservatism ruled. It’s a classic reminder: slow and steady often wins the race, especially in volatile markets.
Regulatory Heads-Up for DC Schemes
With June year-ends locking in these gains, defined contribution (DC) schemes are in for a treat. But a quick regulatory note: unrealized gains and losses from fair value assessments don’t count toward distributable income. So, while the headline 30% return is fantastic, actual payouts might be tempered based on realized returns and portfolio setups. Always check the fine print!
Lessons for Sustainable Retirement
As Neha Datta, Head of Asset Consulting at Zamara Group, wisely notes: “The findings emphasize not just the strong recent returns, but also the importance of diversification and viewing retirement benefits from a long-term perspective. Pension schemes need to remain attuned to asset class behaviour, regulatory developments, and risk-adjusted strategies to support sustainable outcomes for their members over time.”
This Z-CASS report shows optimism for Kenya’s pension industry. Whether you’re a scheme member, trustee, or just planning ahead, the message is clear: diversification, discipline, and a focus on real returns can secure a brighter future.
