Strategic Pension Audits: Kenya’s pension industry is no longer just a savings vehicle — it’s a financial powerhouse. In 2024, its total assets under management (AUM) reached an impressive KSh 2.3 trillion, representing a 30% growth from the previous year. This makes it the second-largest savings pool in the country and a key driver of economic growth.

But growth comes with new challenges. Pension trustees must now navigate market volatility, sovereign debt risks, and increased regulatory scrutiny. This is why strategic pension audits are emerging as a crucial tool — helping funds move beyond basic compliance and toward optimized performance and stronger governance.

Moving Beyond Compliance

Traditional audits simply confirm compliance with regulations. Strategic pension audits, however, go deeper — evaluating the health, resilience, and growth potential of the entire scheme.

They examine:

• Investment concentration and risk exposure – Are assets too heavily allocated to one class, such as government securities?
• Governance practices – Are board and trustee decisions robust and transparent?
• Fraud and operational risks – Are there vulnerabilities that could harm members’ savings?

Why This Matters

Recent figures reveal:

• 52.5% of assets sit in government securities – stable, but overly concentrated.
• Private equity grew 67% in 2024, yet only represents 0.7% of portfolios — a missed growth opportunity.
• Non-traditional assets like unlisted equities and commercial paper grew over 100%, but remain underutilized.

By conducting strategic pension audits, trustees can rebalance their portfolios — responsibly diversifying into technology, infrastructure, and private equity , boosting returns and supporting Kenya’s economic development.

Building Trust and Transparency

Members want accountability, and regulators are increasing oversight. The Retirement Benefits Authority (RBA) is intensifying monitoring, much like the Central Bank of Kenya (CBK) did when it fined banks for governance failures.

This means strategic pension audits are no longer optional. They:

• Strengthen governance frameworks
• Detect fraud risks early
• Prepare funds for future regulatory shifts
• Build member trust through transparency

When embraced fully, these audits become a powerful engine for growth, not just a compliance exercise.

The Path Forward

Kenya’s pension industry is a cornerstone of the country’s financial system. Trustees must shift from reactive management to proactive strategy, using strategic pension audits to:

• Optimize risk
• Diversify investments
• Strengthen governance
• Safeguard members’ retirement savings

By moving beyond compliance, pension funds can secure better returns for members and play a bigger role in driving Kenya’s long-term economic growth.