Retired and retiring county staff can now look forward to better prospects in retirement following the formation of a new taskforce aimed at unlocking Sh60 billion owed to pension firms.
National Treasury Cabinet Secretary John Mbadi has established an 18-member multi-agency taskforce to address the issue of unremitted pension deductions by county governments.
The taskforce, which will assess the pension arrears and develop strategies to clear them, was formed to fulfill the government’s commitment to ensuring timely pension remittances by county governments.
“The purpose of this taskforce is to actualize the government’s commitment to the timely remittance of pension deductions to pension schemes by county government entities,” Mbadi stated in a recent gazette notice.
This move comes after a Senate resolution calling for the formation of the taskforce to explore solutions to the mounting pension arrears.
The Senate County Public Investments and Special Funds Committee, led by Vihiga Senator Godfrey Osotsi, had earlier conducted an inquiry into the non-remittance of pension deductions.
According to Osotsi, the issue is two-fold, with both defunct local authorities and current county governments failing to remit pension funds.
In the gazette notice published last Friday, Mbadi appointed Albert Mwenda, the Director of Budget, Fiscal, and Economic Affairs at the Treasury, as the chairman of the taskforce.
Other members include National Treasury’s Director of Pensions Albert Kagika, Samuel Kiptorus from the Intergovernmental Fiscal Relations Department, Bernice Mwangi from the Office of the Attorney General, Theodora Ochichi from the Office of the Controller of Budget, and Moses Waitara from the Local Authorities Provident Fund.
Other members include representatives from the Retirement Benefits Authority, County Assemblies Forum, and County Pension Fund, as well as experts from the National Social Security Fund and the Treasury’s Legal and Technical Support team.
The taskforce is tasked with developing a strategy to implement the Senate’s recommendations on pension deductions and establishing a formula for the payment of pension liabilities.
The team is also mandated to submit bi-weekly reports to the National Treasury Cabinet Secretary and Senate on its progress.
According to the Senate report, as of March 2023, counties had failed to remit over Sh80 million to pension schemes, including the Local Authorities Provident Fund (Lapfund), the Local Authorities Pension Trust (Laptrust), and the County Pension Fund (CPF).
However, an analysis by the Office of the Controller of Budget revealed discrepancies between the pension arrears reported by the counties and those disclosed by the pension schemes.
According to the schemes’ figures, the total amount owed by counties is Sh85.05 billion, with Sh48.79 billion owed to LapFund, Sh32.35 billion to LapTrust, and Sh3.91 billion to CPF.
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