The National Social Security Fund (NSSF) reported a paper or revaluation gain of Sh46.06 billion on its assets in the 12 months to June 2025, up from Sh2.98 billion the previous year, reflecting the higher market prices of its bonds and equities holdings.
This fair value gain is a measure of capital gains on assets such as bonds, equities and property that remained in the fund’s books over the period. These gains remain unrealised until a time when the fund sells the assets.
The fund rode on these revaluation gains and an increase in investment income to Sh55.8 billion from Sh39.6 billion to report a 152 percent jump in net investment income to Sh105.3 billion in the period, setting up pension savers under the fund for higher returns when they are declared for the year.
Overall, the State-owned pension fund’s net assets rose to Sh572.77 billion in June 2025, from Sh400.2 billion in the previous year.
“The fund recorded 22 percent return on investment in 2025 financial year compared to 12.02 percent in June 2024, which is an 83 percent growth," read the NSSF in financial filings published in the Kenya Gazette.
NSSF invests in a mix of assets which include blue chip stocks at the Nairobi Securities Exchange (NSE), property, fixed deposits and offshore investments but its largest exposure is to long-term government bonds.
The fund’s bond holdings were valued Sh355.39 billion in June, having appreciated by Sh101.6 billion from Sh253.8 billion over the one-year period.
The gain in value was derived from a mix of new purchases in the primary market (new bond sales by the Central Bank of Kenya) and price gains in the secondary market at the NSE on papers it already holds.
Interest rates or yields on new bonds fell last year in line with the CBK cutting its base rate to nine percent from 13 percent in August 2024, triggering a rise in prices and demand for older, more lucrative papers.
There is an inverse relationship between bond prices and yields in the secondary market, where an increase in one results in a fall in the other.
As a result, investors who sold their bonds at the NSE last year were able to command a premium on prices as buyers sought to incentivise them to sell. Investors booked a profit of Sh176 billion on their bond transaction valued at Sh2.71 trillion, representing a return of seven percent on their initial outlay or face value of Sh2.53 trillion on the securities.
In the equities market, investor wealth grew by 51.8 percent or Sh1 trillion to Sh2.94 trillion in 2025, handing major investors like the NSSF significant paper gains on their investments.
The NSSF, like other pension funds, mainly invests in the larger blue chip stocks such as Safaricom, KCB Group, EABL and Equity Group, which were the key drivers of the valuation gains at the bourse with share price appreciation of between 30 percent and 65 percent.
The NSSF was also able to call on a wider pool of cash for its investment activity in the period after remitted member contributions jumped to Sh81.9 billion in the year to June 2025 from Sh59.14 billion in 2024, courtesy of the enhanced statutory deductions.
Contributions to the fund were enhanced starting February 2023 following the implementation of the NSSF Act 2013 after a decade-long court battle.
The new rates kicked in with an increase of a member’s ceiling contribution from Sh200 per month to Sh1,080 —matched by the employer— in the first year.
In the second year, starting February 2024, the rate was raised to Sh2,160, before going up again to Sh4,320 starting February 2025. This month, the monthly contribution cap will go up further to Sh6,480, and finally to Sh8,640 per month in 2027.
