NSSF payouts to retirees drop 10 despite surge in contributions
Business
By
Macharia Kamau
| Jan 29, 2026
The amount that the National Social Security Fund (NSSF) paid to retirees dropped 10 per cent despite posting significant growth in contributions from existing members for the second year in a row as it implements higher rates.
NSSF said in its annual report that the benefits paid to retirees dropped by 10 per cent to Sh8.74 billion in the year to June 2026, attributing it to decline in applications for benefits from Kenyans who have retired.
On the other hand, contributions from Kenyans still in the workforce increased 35 per cent to Sh83.97 billion in the year to June 2025 from Sh62.29 billion a year earlier. The growth is on account of higher rates that Kenyans now pay to NSSF as it continues to implement the new rates in a phased approach starting in 2023.
NSSF said benefits paid to retirees dropped by nearly Sh1 billion on account of reduced applications.
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“Member benefits dropped by Sh977 million or 10 per cent from Sh9.71 billion paid in June 2024 to Sh8.74 billion paid in June 2025. The drop is attributable to fewer applications by members. Member applications dropped by 11,893 or 11 per cent in 2025 compared with 2023/2024 financial year,” said NSSF in the annual report.
During the year, NSSF’s net income – which includes returns from government bonds, real estate and stocks – rose 150 per cent to Sh105.85 billion from Sh42.32 billion in 2024. The growth was on account of a 40 per cent growth in investment income to Sh55.77 billion from Sh39.62 billion as well as fair value gain on revelation of investments, growing to Sh46 billion in 2025 from Sh2.99 billion in 2024.
Kenyans are readying for the next hike in NSSF rates in February this year, as it implements the new rates over five years from 2023. The increase will see monthly contributions increase to a maximum of Sh6,480 from the current Sh4,320. This will have matched by their employers, bringing the total to Sh12,960.
The higher rates, which have been coming to effect every February since 2023, have resulted in a significant jump in annual contributions but also the size of the fund's assets. In the first full year of implementing the higher rates, annual contributions from members rose 132 per cent in the year to June 2024 to Sh62.29 billion from Sh26.87 billion in 2023.
NSSF’s total assets have also grown to Sh572 billion from Sh402 billion in 2024 and Sh313 billion in 2023.
The Fund noted the significant jump in total assets, growing “by Sh172.6 billion or 43 per cent, to reach Sh572 billion as at 30th June, 2025 up from Sh400 billion as at 30th June, 2024.
The higher deductions are anchored in the NSSF 2013 Act but implementation was delayed for 10 years owing to court fights as stakeholders resisted the higher rates through court fights citing the plight of Kenyans but also poor governance at NSSF. A 2023 court of appeal however ruled that the Act is legal and constitutional, overturning a 2022 decision by employment and labour court that had invalidated it.
In the first year, contributions increase from a flat rate of Sh200 to a maximum of Sh1,080, and further to Sh2,160 in 2024 and Sh4,320 in 2025. Employers are legally required to match this amount, doubling what each employee pays to NSSF.
The final increase in February 2027, when the maximum monthly deduction for an employee is projected to rise to Sh8,640 and matched by employers to Sh17,280.