Small schemes are increasingly turning to guaranteed pension funds to shield members’ savings from market volatility and secure predictable returns, driving assets in the products to Sh597.1 billion by June 2026.

Data from the Retirement Benefits Authority (RBA) shows that assets held in guaranteed funds rose by 14.3 percent during the first half of the year to Sh597.1 billion from Sh522.4 billion in December 2025.

The growth has lifted guaranteed funds’ share of the pension industry’s Sh3.09 trillion assets under management to 19.35 percent, up from 18.59 percent six months earlier.

A guaranteed fund is an insurance-based investment product that puts money in assets such as equities, bonds and index funds while providing a minimum guaranteed value at maturity or upon death regardless of drops in the financial market.

RBA attributed the sustained expansion of guaranteed pension funds to the growing preference among smaller schemes for capital protection amid unstable interest rates.

“This sustained growth shows that a substantial segment of smaller schemes continues to favour capital protection, ease of administration, and stable returns offered by approved issuers in a fluctuating interest rate environment,” said RBA.

The growth of guaranteed pension investments comes as pension managers increasingly rebalance portfolios away from traditional fixed-income investments following the easing of monetary policy.

The Central Bank Rate fell to 8.75 percent in February and remained at that level through June, putting pressure on returns from new government securities and bank deposits.

The guaranteed-funds market is, however, becoming increasingly competitive. RBA data shows the top five issuers—Jubilee Insurance, ICEA Lion Life Assurance, Britam Life, Kenindia Assurance and GA Life—controlled 83.4 percent of the segment at the end of June.

Jubilee Insurance emerged as the market leader after its guaranteed-fund assets rose 15 percent to Sh136.6 billion, overtaking ICEA Lion, whose portfolio increased seven percent to Sh135.4 billion.

“A major highlight for the period was a shift in market leadership: Jubilee Insurance grew by 15 percent to reach Sh136.61 billion, overtaking ICEA Lion,” said RBA.

Britam Life Assurance retained third position after its portfolio increased by 13 percent to Sh87.22 billion, while Kenindia posted one of the strongest gains among major players, rising by 27 percent to Sh81.04 billion.

GA Life rounded out the top five after growing its portfolio by 15 percent to Sh57.8 billion.

The competitive pressure was also evident further down the market. Sanlam Life Assurance increased its guaranteed assets by 28 percent to Sh4.7 billion, while Prudential Life grew 24 percent to Sh4.8 billion.

Capex Life recorded the fastest percentage increase, although from a much smaller base, with assets rising by 224 percent to Sh112.4 million.

At industry level, guaranteed funds remain the fourth-largest asset class after government securities. Government securities accounted for Sh1.43 trillion, or 46.35 percent of total pension assets, followed by quoted equities which surged to Sh443.35 billion, taking a 14.37 percent share.

The shift towards equities and alternatives has been reinforced by the strong recovery at the Nairobi Securities Exchange, where pension funds benefited from valuation gains. Quoted equity holdings increased by 41.7 percent during the first six months of 2026.

However, while guaranteed-funds growth shows that larger schemes and fund managers are increasing exposure to equities, offshore investments, private equity and other alternatives, smaller schemes continue to place a premium on capital preservation and predictable investment outcomes.

→palushula@ke.naionmedia.com

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