Duale calls for diversified investment of Ksh2.81T pension funds
By Faith Lagat, March 9, 2026Health Cabinet Secretary Aden Duale has called for new investment options for Kenya’s pension funds, saying the country’s growing retirement savings can support both retirees and national development.
In a post on his X account on March 9, 2026, Duale said the country’s pension and collective investment funds, estimated at about Ksh2.81 trillion, represent significant domestic capital that can contribute to economic growth.
Duale noted that the sector has expanded in recent years, including a significant increase in 2023, but said most pension investments remain concentrated in Treasury bills and government bonds. “Traditional investments are insufficient,” Duale said, urging consideration of diversified opportunities that could strengthen returns and stimulate economic activity.
He said retirement savings could also play a role in expanding employment opportunities for younger generations, including the families of contributors whose savings are invested in the schemes.
“Kenya’s domestic capital holds immense potential, with pension and other collective funds totalling Ksh 2.81 trillion, patient capital that can support national development while securing the future of pensioners,” he said.
Ruto signs Judges’ Retirement Benefits Act
Duale’s remarks came hours after President William Ruto signed the Judges’ Retirement Benefits Act into law on March 9, 2026. The law establishes a framework for retirement benefits for superior court judges.
Under the new law, judges currently in office will remain under a defined benefits system, while future appointees will join a contributory retirement scheme. The arrangement requires contributions of 7.5 per cent from judges and 15 per cent from the government.
The Act also outlines additional post-retirement benefits for judges, including medical cover and other privileges aimed at supporting their welfare after leaving office.
Pension sector reforms under discussion
At the same time, the Retirement Benefits Authority is considering further reforms aimed at expanding participation and flexibility within the pension sector. Among the proposals is the introduction of a “two-pot” pension system that would divide retirement contributions into two portions.
One portion would remain preserved for retirement, while the other could be accessed for urgent financial needs such as medical expenses, school fees or starting small businesses.
The proposal is expected to form part of discussions linked to the FY 2026/2027 Budget Policy Statement and is intended to encourage more participation in formal retirement savings schemes, particularly among workers in the informal sector.