Kenya’s pension system has received a C grade in its first global assessment, with a weak score on retirement benefit adequacy raising concerns over the financial security of Kenyans in old age.

The low rating highlights the challenge of ensuring retirees have sufficient income to meet their needs after leaving the workforce.

The 2026 Marsh CFA Institute Global Pension Index scores Kenya at 53.1 points overall, awarding the country a D grade for retirement benefit adequacy despite stronger performance in pension system integrity.

Kenya scored 38.9 points for adequacy, 53.0 for sustainability and 76.0 for integrity, indicating that while the system performs relatively well in governance and oversight, it faces significant challenges in providing retirement benefits that adequately meet people's needs.

Its B+ grade for integrity reflects comparatively strong features in areas such as regulation, governance, protection and communication.

However, the D grade for adequacy signals major shortcomings in the ability of retirement income to support pensioners.

The results emerge as pension systems worldwide grapple with demographic changes that are extending the time people spend in retirement.

In Kenya, life expectancy at age 65 has increased by 2.9 years since 1950, according to the report, placing greater importance on savings that can sustain retirees over longer periods.

“Kenya’s pension system continues to evolve, and the inclusion of the country in this index is an important benchmark to see where we stand and what needs to be done better," said Fred Waswa, group chief executive of Octagon Africa.

"The findings give us an opportunity to have a more informed conversation about retirement adequacy, sustainability and the long-term financial security of Kenyans."

Octagon Africa supported Kenya’s entry into the index through its strategic partner Alexforbes, contributing local data and insights during the assessment process.

The inaugural rating offers a reference point for Kenya’s retirement sector, providing a basis for tracking performance and identifying areas requiring policy and industry attention, particularly in improving the adequacy of benefits.

The 2026 index now covers 55 retirement income systems, representing more than 66 per cent of the global population, after incorporating Kenya, Qatar and the Dominican Republic into the assessment.

The report measures pension performance through more than 50 indicators grouped into three categories: adequacy, sustainability and integrity. These account for 40 per cent, 35 per cent and 25 per cent of the overall score, respectively.

The index then grades pension systems from A to E based on their overall scores. An A grade is awarded to systems scoring 80 and above, B+ to those scoring 75–79, B for 65–74, C+ for 60–64 and C for 50–59.

Systems scoring 35–49 receive a D grade, while those scoring below 35 get an E. Kenya’s score of 53.1 therefore places its pension system in the C category.

The Netherlands led the ranking with 85.8 points and an A grade, followed by five other A-grade systems: Denmark, Iceland, Singapore, Israel and Australia. Argentina recorded the lowest score, at 43.7 points, receiving a D grade.

Across the assessed systems, the report identifies broad pension coverage, effective governance and a minimum income safety net as features associated with stronger retirement outcomes.

It also notes that countries face different economic, cultural and political circumstances, making it difficult to apply a single pension model everywhere.

For Kenya, the first assessment establishes a baseline against which future performance can be measured, with the results pointing to the need to strengthen retirement income adequacy while preserving existing strengths in pension system integrity.