Kenya’s Deposit Administration (DA) funds recorded strong growth in assets and improved declared returns in 2025, reflecting rising confidence in guaranteed pension investment solutions amid a changing economic environment.
According to the latest Survey of Insured Deposit Administration Returns released by Zamara Group, total assets held under deposit administration arrangements grew to approximately KSh475.2 billion by the end of 2024, up from KSh399.3 billion recorded in 2023.
The report highlights the continued long-term expansion of Kenya’s retirement benefits industry, driven by growing demand for secure and professionally managed pension savings products.
Guaranteed Pension Funds Gain Popularity
Speaking on the findings, Neha Datta said the growth reflects the increasing importance of guaranteed investment solutions within retirement schemes, particularly during periods of economic and market uncertainty.
“The sustained growth in DA funds highlights the increasing importance of guaranteed investment solutions within retirement schemes, particularly during periods of economic and market volatility,” she said.
Annual contributions into DA funds also rose sharply to KSh88.8 billion in 2024, representing a 34 per cent increase from the previous year and marking the strongest growth recorded over the last decade.
The report attributes the growth to increased inflows into guaranteed funds following adjustments to NSSF contribution rates, improved declared interest rates, and anticipated uptake linked to enhanced pension tax incentives introduced in late 2024.
Declared Returns Improve in 2025
The survey found that the average declared return for deposit administration funds increased to 12.3 per cent in 2025, compared to 11.4 per cent in 2024 and 8.9 per cent in 2023.
According to the report, the improved performance was supported by a relatively stable interest rate environment as well as recoveries in equity and offshore asset class returns.
Datta noted that retirement scheme sponsors and trustees are increasingly favouring investment structures that provide stability and downside protection while still delivering competitive returns.
“The strong growth in both contributions and assets under deposit administration arrangements demonstrates growing confidence among retirement scheme sponsors and trustees in guaranteed funds as a stable long-term savings vehicle,” she added.
Industry Shows Long-Term Resilience
The survey, which covered 17 insurance companies offering deposit administration services in Kenya over a minimum five-year reporting period, also revealed resilient long-term industry performance.
The five-year industry average declared return stood at 10.1 per cent, with provider averages ranging between 5.9 per cent and 11.8 percent annually.
Over a 10-year period, the industry average declared return was 9.4 per cent, with annualised returns ranging from 5.6 per cent to 11.3 percent.
The report further assessed risk-adjusted performance and return variability across providers, noting that differences in volatility were influenced by investment mandates, client profiles, and insurer risk appetites.
Group Pension Schemes Drive Growth
Group Pension Schemes remained the largest contributors to DA funds, accounting for 54 per cent of total contributions in 2024.
Personal Pension Plans contributed 24 per cent, while Umbrella Schemes accounted for 22 per cent, underscoring the growing role of institutional retirement savings in driving overall market expansion.
The report advises trustees to continue evaluating providers based on long-term consistency, governance structures, return volatility, and alignment with scheme objectives, despite the attractiveness of guaranteed minimum returns and professional fund management offered by deposit administration funds.