Security in old age is the only reason pension schemes exist. Having worked hard in their prime, one should be comfortable in retirement.
Sadly, the public sector is notorious for making a mockery of the sacrifice of saving that employees of the government and its agencies make.
Reports, therefore, that not all the related deductions made from civil servants’ salaries—especially by the county governments—ever reach their pension schemes are highly disappointing. The establishment of the Retirement Benefits Authority (RBA) was so that it could monitor and ensure that the savings are protected or, more precisely, prudently invested to generate even more revenue for the contributors.
Its mandate is to steer the retirement benefits industry through prudent regulation and supervision of the sector’s development and protect the interest of members and their employers.
The National Treasury and the Kenya Revenue Authority (KRA) have flagged the failure of the 47 counties to remit Sh90.69 billion in statutory deductions to pension schemes. The amount would make a huge difference in the operations of the pension schemes. Counties have not been transferring deductions to the Local Authorities Provident Fund (Lapfund), Local Authorities Pension Trust (Laptrust) and the County Pension Fund (CPF). The Lapfund is owed Sh48.79 billion, Laptrust Sh32.35 billion and CPF Sh3.91 billion.
The Treasury is considering deducting the arrears from the counties’ equitable share of national revenue and engage KRA to help collect the debt.
There is a hitch though, as Article 219 of the Constitution states that a county’s financial allocation must be released without undue delay or deduction unless Parliament sanctions it. Failure by employers to remit statutory deductions is a serious transgression that must be stopped.