PSSF cuts reliance on government securities as assets hit Sh340.4 billion
Government securities, which accounted for 99 per cent of the Fund’s portfolio in 2023, now make up 74 per cent, according to figures released.
Nairobi, Kenya – The Public Service Superannuation Fund (PSSF) has significantly reduced its reliance on government securities to pursue higher returns through equities and other investments, with its assets reaching Sh340.4 billion as of June 30, 2026. Government securities, once comprising 99% of the Fund's portfolio, now constitute only 74%, according to recent data.
This shift has elevated quoted equities to second-largest asset class at 14%, while corporate bonds account for 5%. Offshore investments, private equity, and property investments make up the remaining 3%, 2%, and 1% of the portfolio, respectively.
The diversification move, aimed at balancing risk, liquidity, and returns, is part of PSSF's strategy to safeguard members' retirement savings in the long term. PSSF CEO Jonah Aiyabei emphasized that the diversification aligns with the Fund's goal to preserve the value of members' savings over extended investment periods. The Fund's assets under management have grown to Sh340.4 billion as of June 30, 2026, from a membership base of 529,635, with employees contributing 7.5% of their basic pay, and the government contributing 15%.
The Fund reported a 17.68% investment return for the 12 months ending June 30, 2025, with annualized returns over three years reaching 19.7%. However, it's essential to note that these returns are distinct from the income distributed to individual members. For the year ended June 2025, the Board of Trustees approved a 17.89% income distribution to members, up from 11.9% the previous year.
This income distribution improvement is attributed partly to the recovery in financial markets, including gains in listed banking and telecommunications companies.
PSSF's membership has grown from 330,318 at its inception to 529,635 as of June 30, 2026, with teachers making up the largest group at 332,950 members, followed by disciplined services at 120,084, civil servants at 60,322, and county governments at 16,279. Despite the diversification, government securities still constitute nearly three-quarters of PSSF's investments, exposing the Fund to the domestic fixed-income market's performance.
Nevertheless, the increased equity allocation introduces the potential for higher long-term returns but also introduces market volatility risks.
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