The National Social Security Fund (NSSF) has reported a paper gain of Ksh 2.98 billion for the financial year ending June 2024. This increase was driven by a rebound in the stock market and a stronger bond portfolio.
The growth in NSSF’s investments was largely supported by rising stock values and improved performance of government bonds, which form a big portion of the fund’s asset base.
The valuation of listed equities held by NSSF rose by Ksh 8.2 billion, bringing the total to Ksh 61.19 billion. At the same time, its bond portfolio saw substantial growth, increasing by Ksh 67.2 billion to reach Ksh 253.8 billion.
This upward movement was mainly due to the recovery of the Nairobi Securities Exchange (NSE) in early 2024, which benefited from an easing of dollar shortages and renewed investor confidence.
Several top companies at the NSE experienced significant price surges, contributing to NSSF’s gains.
Key firms such as Safaricom, Equity Group, KCB Group, and EABL recorded share price increases ranging between 25 and 42 percent during the first half of the year.
The improved stock performance translated into better returns for NSSF’s investment portfolio, pushing its net investment income up by 238 percent to Ksh 41.7 billion.
This sharp increase in earnings raises hopes for better payouts to pension savers in the near future.
The overall financial strength of NSSF also improved, with its total asset base expanding to Ksh 402 billion from Ksh 313.9 billion in June 2023. This growth was supported by rising member contributions, following the implementation of the NSSF Act 2013.
Under the revised contribution structure, monthly deductions have increased from Ksh 200 to Ksh 2,160 as of 2024.
These deductions are expected to rise further to Ksh 8,640 by 2027, increasing the fund’s revenue streams and enhancing its investment capacity.
With more funds coming in and a positive outlook for the financial markets, NSSF is optimistic about continued investment growth in the coming years.
The fund is positioning itself to take advantage of opportunities in both equities and bonds to maximize returns for pension contributors. However, the sustainability of these gains will depend on market stability and economic conditions.
A prolonged downturn in the stock market or rising inflation could affect future performance, making it crucial for NSSF to adopt prudent investment strategies.While the latest financial results paint a positive picture, contributors will be keen to see whether these paper gains translate into real benefits.
Many pension savers have in the past questioned the fund’s management of resources and whether the increased contributions will lead to improved retirement benefits.
As NSSF continues to expand its investment portfolio, transparency and accountability will remain key in ensuring that contributors reap the rewards of their savings.
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