The State of Pension Administration in East Africa: Challenges, Openings, and What Comes Next

East Africa — here meaning Kenya, Tanzania, Uganda, Rwanda, Burundi, and South Sudan — is now home to well over 220 million people in total, based on recent national estimates for 2025.  The region blends fast-growing capitals like Nairobi and Kampala with largely rural economies where agriculture and informal trade still dominate employment. Pension systems in this region matter for three reasons: they are one of the only formal old-age income guarantees available to workers, they are increasingly important pools of domestic long-term capital, and they are under real stress from informality, governance weaknesses, and demographic change. (ILO, 2021; Retirement Benefits Authority [RBA], 2025).

This review walks through how these systems were built, who they reach (and don’t reach), how they fit into broader social protection, how they’ve been reforming, what the financial picture looks like, where digitalization is changing the game, and what still needs urgent work.

1. Historical foundations: from colonial civil service promises to national funds

Most East African pension systems trace back to late colonial and early post-independence arrangements that were designed first for civil servants, not the general population. In Anglophone countries like Kenya, Tanzania, and Uganda, early schemes were set up mainly as non-contributory or employer-financed defined benefit (DB) promises for civil service and military staff. Over time, these were paired with “provident funds,” which are defined contribution (DC) style savings plans that pay out a lump sum at retirement rather than a lifelong monthly pension. (Organisation for Economic Co-operation and Development [OECD], 2009).

Kenya’s National Social Security Fund (NSSF) was created in 1965 by an Act of Parliament as a national provident fund. It initially sat inside the Ministry of Labour and paid lump-sum benefits at exit. In 1987 it was converted into a state corporation overseen by a Board of Trustees, and in 2013 a new NSSF Act began transforming it from a pure provident fund into a pension scheme with mandatory earnings-based contributions for most workers aged 18–60. (NSSF Kenya, 2025).

Tanzania’s first National Provident Fund dates to 1964, and in 1997 that fund was replaced by the National Social Security Fund (NSSF), which covers private sector and informal workers. Public sector workers historically had their own funds. In 2018, Tanzania passed the Public Service Social Security Fund (PSSSF) Act to merge four separate public schemes — PPF, PSPF, LAPF, and GEPF — into one consolidated Public Service Social Security Fund for government workers, while NSSF remained the main fund for private sector workers. This merger aimed to improve sustainability, reduce fragmentation, and simplify administration. (International Social Security Association [ISSA], 2022; UNICEF Tanzania, 2022).

Uganda’s National Social Security Fund (NSSF Uganda) was established by legislation in 1985 to collect, invest, and ultimately pay out retirement savings (largely as lump sums) for private sector workers not covered by the government pension. It is a mandatory defined contribution scheme, funded by a combined 15% of salary (10% employer, 5% employee), and it pays benefits at age 55 (or earlier under certain conditions). (National Social Security Fund [NSSF] Uganda, 2025).

Rwanda and Burundi followed a more francophone model: contributory social insurance for civil servants and salaried workers emerged in the 1950s–60s. Rwanda later consolidated multiple schemes into the Rwanda Social Security Board (RSSB) in 2010, which today administers pensions alongside health insurance and work injury benefits. (Rwanda Social Security Board [RSSB], 2024a).

South Sudan is newer. After independence in 2011, the South Sudan Pensions Fund Act of 2012 established a national public service pension fund with the goal of assuming responsibility for civil service retirement liabilities (and even pursuing accrued pension contributions owed from pre-independence Sudan). Implementation has been uneven, contributions have not always been remitted on time, and the fund’s governance and cash flow are still being stabilized. (South Sudan Pensions Fund, 2023; ISSA, 2022).

Across the region, you can see a common arc: (1) colonial/state worker benefits first, (2) national provident funds for formal employees, (3) slow movement toward broader social insurance and portability, and (4) ongoing consolidation and regulatory reform to make these schemes more coherent and solvent. (OECD, 2009; ISSA, 2022).

1. Who is actually covered — and who is left out

Coverage in East Africa is still overwhelmingly tilted toward people in formal wage employment. That’s a small slice of the labour force in most of these countries, because informality is dominant. In Burundi, for example, informal employment accounts for roughly 90–98% of jobs. In Rwanda and Uganda, informal and self-employment make up the majority of total employment, especially in agriculture and street-level services. (International Labour Organization [ILO], 2024).

Kenya historically covered only about 15% of its workforce across all retirement arrangements as of the late 2000s, with roughly 10% of workers (about 800,000 members at that time) in the NSSF, plus smaller shares in civil service and occupational schemes. (OECD, 2009) Despite growth in assets and regulatory tightening since then, the basic pattern remains: most formal wage earners are covered; most informal earners are not. (RBA, 2025).

Uganda’s NSSF Uganda today has become the single largest pension fund in the East African Community, with assets around UGX 26 trillion (about US$7+ billion) in 2025, and millions of registered members. But even so, active contributors are still mainly salaried workers in the formal private sector, and enforcement against noncompliant employers is a continuing struggle. (NSSF Uganda, 2025).

Rwanda is experimenting with something different: voluntary long-term savings for informal workers. The “Ejo Heza” Long-Term Savings Scheme was launched nationally to bring market vendors, moto-taxi drivers, and smallholder farmers — people with irregular income — into retirement saving. It is fully digital, tied to national ID, and can be topped up with small contributions, often via mobile money. (RSSB, 2024b).

Kenya’s informal sector is also in focus. The Retirement Benefits Authority has backed schemes like the Mbao Pension Plan (a micro-pension marketed around the idea of saving as little as 20 Kenyan shillings a day via mobile money) and newer initiatives such as the Kenya National Entrepreneurs Savings Trust (KNEST), which target the self-employed and micro-entrepreneurs that make up roughly 80+% of Kenya’s labour force. (RBA, 2023–2025).

Bottom line: East Africa is moving beyond “civil servants plus big employers,” but informality is still the main exclusion engine. If you sell tomatoes in Arusha or run a boda-boda in Gulu, you’re still far less likely to be saving in a regulated pension than a teacher, nurse, bank teller, or parastatal engineer. (ILO, 2021; ILO, 2024).

1. How pensions fit into the wider social protection picture

Pensions in East Africa are not isolated. They sit alongside health insurance, work injury insurance, and social assistance (cash transfer) programs. In Rwanda, for instance, the Rwanda Social Security Board (RSSB) doesn’t just manage old-age pensions; it also administers statutory health coverage (including community-based health insurance), occupational hazards, and maternity benefits. That makes Rwanda relatively integrated: a single institution touches health, retirement, disability, and survivors’ benefits. (RSSB, 2024a).

Rwanda also links these contributory schemes with social assistance for the poorest through the Vision 2020 Umurenge Programme (VUP), which provides public works jobs and direct cash transfers to extremely poor households, including households headed by elderly caregivers. The World Bank has documented how VUP has acted as a safety net for vulnerable households, including those supporting orphans. (World Bank, 2022).  This layering matters in a region where extended family — especially grandparents — still carries much of the burden of caring for orphaned children, including children affected by HIV/AIDS. (World Health Organization [WHO] Regional Office for Africa, 2024).

Kenya historically linked NSSF with the national health insurance system (which has recently restructured into the Social Health Authority and new health insurance funds), and both are part of a broader push toward universal social protection. The legal reforms around Kenya’s NSSF in 2013–2025 explicitly try to guarantee not just lump-sum payouts but also a more predictable monthly income in retirement, moving toward a more “Tier I / Tier II” social insurance model. (NSSF Kenya, 2025; DLA Piper, 2025)

Regionally, the East African Community (EAC) has been pushing portability and regulatory alignment through bodies such as the EAC Capital Markets, Insurance and Pensions Committee and via technical coordination platforms like the East and Central Africa Social Security Association (ECASSA). The idea is that, as labour becomes more mobile under the EAC Common Market Protocol (in force since 2010), a worker from Uganda who spends five years in Kenya and then moves to Rwanda should not lose pension rights just because borders were crossed. (East African Community, 2010; UN Economic Commission for Africa, 2024).

1. Reform trajectories: consolidation, regulation, and parametric change

Since the 1990s and especially after 2000, East African pension systems have moved in a few clear directions:

• Converting provident funds into longer-term pension schemes.
  Kenya’s NSSF Act No. 45 of 2013 and subsequent court rulings and phased implementation (2014–2025) shifted contributions from a flat nominal deduction (a few hundred shillings a month) to a percentage of pensionable earnings, split 6% employee / 6% employer, with earnings bands (“Tier I” and “Tier II”) and higher ceilings that continue to rise. (NSSF Kenya, 2025; KPMG Kenya, 2025; Court of Appeal of Kenya, 2023).
• Regulating and liberalizing the private and occupational pension space.
  Uganda established the Uganda Retirement Benefits Regulatory Authority (URBRA) by law in 2011/2012 to license, supervise, and open up the pensions market beyond just the civil service scheme and NSSF Uganda. That reform aimed to increase competition, improve governance, and allow new private schemes to operate under common rules. (URBRA, 2024).
• Consolidating fragmented public schemes.
  Tanzania’s 2018 PSSSF merger pulled four public-sector pension funds into one. The goal was to improve sustainability and reduce duplicated administration costs, while leaving the NSSF to focus on private sector and informal workers. (ISSA, 2022; UNICEF Tanzania, 2022).
• Raising retirement ages / tightening eligibility.
  Most of the region now pegs full old-age benefits around 55–60+ years for provident-style benefits, and in some cases 60–65 years for contributory pensions. In Uganda, age benefits are generally payable at 55 (or at 50 after a year out of covered employment). (NSSF Uganda, 2025). Rwanda’s statutory pension under RSSB treats 60 as early retirement and 65 as normal retirement for civil servants; reforms in the last decade formalized those thresholds. (RSSB, 2024a).

All of this reflects a shift away from “political” promises to civil servants toward more clearly financed social insurance structures that (at least in principle) apply to any worker with earnings, including the self-employed. (OECD, 2009; DLA Piper, 2025).

1. Financial strength, solvency pressure, and why pension funds now matter to macro policy

Pension assets in East Africa are no longer trivial — they’re macroeconomic actors.

Kenya’s retirement benefits industry managed about KSh 2.23–2.30 trillion at December 2024 (roughly USD ~18 billion), an increase of roughly 17–30% over 2023 levels. Those assets are now equal to roughly the mid-teens percentage of Kenya’s GDP and represent one of the country’s largest pools of domestic long-term capital after bank deposits. (RBA, 2025; Andersen Kenya, 2025).

Uganda’s NSSF Uganda reported assets under management of about UGX 26 trillion in FY2024/25 (≈ USD 7+ billion), up ~17.5% year-on-year, with earnings of UGX 3.5 trillion and ongoing double-digit growth in member contributions. (NSSF Uganda, 2025). The fund invests heavily in government securities, real estate, and regional equities, making it a cornerstone of Uganda’s domestic capital market. (NSSF Uganda, 2025).

Tanzania’s consolidation of public service pensions into PSSSF was explicitly about fiscal sustainability. Before the merger, multiple parallel public-sector schemes were carrying significant unfunded liabilities. After 2018, the government signaled it wanted a single public-service fund with clearer contribution rules and a unified liability profile, instead of four separate promises pulling on the same Treasury. (ISSA, 2022; UNICEF Tanzania, 2022).

These funds are thus wearing two hats at once:
• Social protection: paying benefits to retirees, survivors, and disabled workers.
• Domestic investors: buying government bonds, financing housing and infrastructure, and providing patient capital.

That dual role creates both opportunity and risk. The opportunity is obvious: East African governments need long-term financing for infrastructure, housing, and energy, and pension funds are one of the only deep local savings pools to tap. (RBA, 2025; NSSF Uganda, 2025). The risk is that political pressure to “invest patriotically” can push funds into undiversified or politically driven projects, or into holding too much domestic government debt, which concentrates risk. Regulators in Kenya, Uganda, and Tanzania increasingly talk about governance, transparency, asset allocation rules, and stress testing because mismanagement scandals and governance failures have historically eroded trust. (URBRA, 2024; DLA Piper, 2025).

1. Adequacy and demographic pressure

Adequacy is the quiet crisis. Even where schemes are solvent on paper, many retirees still receive relatively modest benefits compared to living costs, especially if they cash out as a lump sum and outlive the money. (OECD, 2009).

This matters more every year because East Africa, while still very young, is aging. The World Health Organization and other regional observers note that improved survival into older ages means the absolute number of older adults is rising fast, even if the share of people over 65 is still small by European standards. By mid-century, Sub-Saharan Africa will see a sharp increase in the 60+ population, and East African policymakers already know that family-based old-age support is under strain — urbanization, migration, and HIV/AIDS have all weakened the assumption that “the children will provide.” (WHO Regional Office for Africa, 2024; World Bank, 2022).

That means two big policy tensions:
• Raising contribution rates / retirement ages to keep funds solvent can make schemes feel unaffordable or politically painful. Kenya’s move to a 12% total contribution (6% worker, 6% employer), with tiered earnings limits that increase over time through 2025 and beyond, is a live example. (NSSF Kenya, 2025; KPMG Kenya, 2025).
• Keeping benefits generous without broadening the contributor base just isn’t fiscally sustainable — especially in civil service funds — because the ratio of pensioners to current contributors climbs as the public workforce matures and governments struggle to remit their own employer obligations on time. (ISSA, 2022; UNICEF Tanzania, 2022; South Sudan Pensions Fund, 2023).

1. Digital transformation: the quiet revolution

If there is one genuine bright spot, it is digitalization.

Kenya’s pension reforms are being implemented alongside mobile-first savings products for informal workers (for example, micro-pension products like Mbao and new platforms under KNEST). These use mobile money rails (like M-Pesa) and “save a few shillings a day” messaging to lower the psychological and logistical barrier to participation. (RBA, 2023–2025).

Rwanda’s Ejo Heza (literally “bright tomorrow”) is almost entirely digital: enrollment is tied to your national ID, contributions can be paid electronically in very small amounts, and balances are portable even if you move across districts or switch jobs in the informal sector. The goal is to build lifelong individual savings accounts for people who will never have a traditional HR department deducting pension contributions from payroll. (RSSB, 2024b).

Uganda’s NSSF Uganda has leaned hard into digital channels as its membership base has exploded. The fund now processes large volumes of contributions and benefit claims electronically, integrates with mobile money, and publishes annual performance figures showing double-digit year-over-year asset and contribution growth (UGX 26 trillion AUM and UGX 3.5 trillion in earnings in FY2024/25). (NSSF Uganda, 2025).

For social security administrations, this shift is strategic. Instead of trying to build every core benefit, compliance, and contribution system from scratch, many agencies in the region are now looking at off-the-shelf, enterprise-grade administration platforms (commercial social security management systems) plus open APIs. The idea is: let a proven core, like Interact SSAS, handle contributions, compliance, benefits, and payments; then build local add-ons (for example, specific mobile apps for very targeted segments of independent workers like fishermen, farmers or taxi-drivers) around that core using REST-style interfaces. This is seen as faster, cheaper, and less risky than decade-long bespoke IT projects that often stall.

1. What has to happen next

From the evidence above, five priorities keep coming up in East Africa:

1. Expand coverage to informal and gig workers, not just salaried staff.
   The majority of workers are still uncovered. Voluntary micro-schemes (Mbao in Kenya, Ejo Heza in Rwanda) and flexible contribution rules are promising, but they need scale, trust, and maybe matching incentives for the very poor. (RSSB, 2024b; RBA, 2025).  Matching funds schemes of course require even tighter compliance and verification mechanisms.
2. Keep consolidating and professionalizing funds.
   Tanzania’s 2018 merger shows governments can reduce fragmentation. Uganda’s URBRA model shows regulators can open the market while insisting on governance and reporting. (ISSA, 2022; URBRA, 2024).
3. Protect adequacy, not just solvency.
   If pensions only ever pay out small lump sums that are eroded by inflation within a few years, then they are not solving old-age poverty — they’re just forced savings accounts. Policymakers are experimenting with annuitized monthly benefits, indexation rules, and minimum benefit floors, but this is still early. (OECD, 2009; WHO Regional Office for Africa, 2024).
4. Make portability across borders real.
   Workers do move within the East African Community. Full portability of accrued benefits — so your Tanzanian/NSSF or Ugandan/NSSF credits follow you into Kenyan schemes, and vice versa — is still more aspiration than reality, but the policy direction is clear. (East African Community, 2010; UN Economic Commission for Africa, 2024).
5. Use pension assets wisely.
   These funds are now among the biggest domestic investors in Kenya and Uganda. That’s powerful. But it also means every governance failure, every politically directed “white elephant” real estate project, and every missed employer remittance becomes a national issue, not just an HR issue. Transparent reporting, independent boards, and prudent asset allocation are not “nice to have,” they are existential. (NSSF Uganda, 2025; RBA, 2025).

Conclusion

East Africa’s pension landscape is in the middle of a slow but very real transformation. The old model — colonial-era civil service pensions plus a provident fund for formal workers — is giving way to regulated, pooled social insurance schemes that aim (at least in design) to cover any worker with earnings, including informal traders and gig workers. Kenya’s ongoing NSSF reform, Tanzania’s PSSSF merger, Rwanda’s digital voluntary savings for informal workers, and Uganda’s consolidation of assets and regulatory oversight all point in the same direction: broader coverage, stronger governance, deeper capital markets, and more use of digital rails. (NSSF Kenya, 2025; ISSA, 2022; RSSB, 2024a; URBRA, 2024).

The stakes are high. Within the next two decades, East African countries will have millions more older adults than ever before, many without adult children able (or willing) to shoulder full support. (WHO Regional Office for Africa, 2024). Pension systems are no longer a technocratic afterthought. They are now central to social protection, fiscal policy, capital market development, and even political stability.

References

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DLA Piper. (2025). Recent employment law reforms in Kenya: NSSF Act implementation and contribution structure. (Legal update on NSSF Act 2013 rollout and Tier I / Tier II design).

East African Community. (2010). EAC Common Market Protocol and mobility of workers. (Framework for portability of social security rights within the EAC).

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Rwanda Social Security Board. (2024a). Mandate and schemes administered (pension, occupational hazards, and health coverage including community-based insurance).

Rwanda Social Security Board. (2024b). Ejo Heza Long-Term Savings Scheme overview (voluntary, digital enrollment for informal workers).

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UNICEF Tanzania. (2022). Social protection brief: Mainland Tanzania. (Summary of PSSSF merger of PSPF, PPF, LAPF, GEPF and role of NSSF for private sector).

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