Capital Markets

Retirement scheme assets hit Sh1trn mark on NSE recovery

RBA chief executive Nzomo Mutuku
RBA chief executive Nzomo Mutuku. PHOTO | SALATON NJAU | NMG 

Assets held by retirement schemes rose Sh167.44 billion last year, for the first time crossing the Sh1 trillion mark on improved compliance by employers and recovery in the stock market.

Pension schemes managed Sh1.08 trillion last December, 18.35 per cent more than Sh912.66 billion a year earlier according to data released by the Retirement Benefits Authority (RBA).

The country’s 19 fund managers and 11 approved issuers controlled Sh904.91 billion of the retirement assets, while trustees of various schemes directly managed 109.3 billion in property investments.

The remainder Sh65.96 billion was internally administered by the National Social Security Fund, the statutory pension fund.

“The growth of the assets can be attributed to improved compliance, gradual recovery in the stock market after the banking crisis in 2016…,” said the RBA in a statement.

Govt securities

About Sh394.19 billion or 36.49 per cent of the assets were held in government securities followed by investments in immovable property valued at Sh226.72 billion or 20.99 per cent of the total pension industry’s portfolio.

Investments in listed shares stood at Sh210.17 billion or 19.46 per cent of the total while Sh142.97 billion was held in guaranteed funds, the statistics based on 1,271 scheme reports show.

NSSF consolidated its position as the largest pension scheme with Sh209.26 billion or 19.37 per cent of the industry assets last December, Sh40.77 billion more than a year earlier.

About Sh143.30 billion of the NSSF funds were managed by its external fund managers such as Gen Africa Asset Managers (Sh35.64 billion), Stanlib Kenya (Sh27.74 billion), Old Mutual (Sh26.72 billion), Britam (Sh27.26 billion) and ICEA Lion (Sh25.95 billion).

Largest fund manager

Sanlam Investments East Africa, formerly PineBridge, however, remained the largest fund manager for pension schemes with Sh182.73 billion total assets up from Sh159.14 a year earlier.

Sanlam was followed by GENAfrica, which managed Sh153.17 billion, Stanlib Kenya (Sh134.72 billion), Old Mutual Kenya (Sh120.05 billion) and Britam (Sh60.67 billion).

The five fund managers watched over 651.33 billion, or 71.97 per cent, per cent of the entire wealth of pension schemes, a growth of 9.52 per cent from 594.7 billion in December 2016.

“The retirement benefits sector is expected to grow in the next quarters given the current relatively stable political environment and the gradual comeback of the stock market,” RBA said.

“The schemes are also expected to venture into investing in alternative assets classes given the broadening of the allowable investment categories.”