Nairobi, Feb. 8 -- Pension contributors are staring at a major erosion of their savings after annual returns on investments in 2023 by pension funds shrunk below the rate of inflation.

A periodic pension industry survey done by fund administrator Zamara shows that pension schemes made a weighted average return of 1.4 percent in 2023, which was lower than the 1.7 percent return recorded in 2022.

At the same time, Kenya's average inflation stood at 7.7 percent in 2023, meaning that the average saver lost value in real terms. This was the second straight year of pensions failing to beat inflation after the 2022 return trailed the 7.64 percent average increase in cost of living.

The returns from investments determine the interest that pens...