Crisis as counties’ pension dues hit Sh90bn
Sunset years for those leaving public service bleak as amount of money yet to be remitted grows daily.
What you need to know:
- Sunset years for those leaving public service bleak as amount of money yet to be remitted grows daily.
- NSSF debt comprises Sh2.7 billion from devolved units and Sh18 billion from defunct local authorities,
- Other pension funds are owed over Sh70 billion by the 47 county governments.
Retirerees from county governments are staring at bleak sunset years after unremitted pension funds by the devolved units coupled with interest, surged past Sh90 billion as of January this year.
The unremitted money includes contributions to the Local Authorities Pensions Trust (LAPTRUST), Local Authorities Provident Fund (LAPFUND), the National Social Security Fund (NSSF), and the County Pension Fund.
LAPFUND, a retirement benefits scheme for county government staff, including county assembly members, takes 12 per cent contribution from members and a 15 per cent contribution from the devolved units.
Records indicate that the NSSF debt comprises Sh2.7 billion from devolved units and Sh18 billion from defunct local authorities, while other pension funds are owed over Sh70 billion by the 47 county governments.
LAPFUND alone is owed about Sh50 billion, with Laptrust’s debt standing at Sh33.01 billion and CPF at Sh3.68 billion.
This mounting debt spells trouble for retiring county government workers who may struggle to make ends meets after exiting public service.
The Kenya County Government Workers Union has raised concerns, highlighting the significant challenge to the social security of pensioners.
Unremitted employer pension contributions are listed as the second biggest pending bills for counties, after arrears owed to suppliers of goods and services, and contractors of projects.
“Counties have been opting to pay other debts over remitting pension dues. This matter needs attention and we will petition the Treasury to look for ways of addressing the matter urgently,” said the union’s secretary general Roba Duba.
“The issue of pension scheme management has not been given the necessary attention it deserves by county governments,” he added. Mr Duba said laws governing the running of the schemes have also not been followed by various stakeholders.
“We implore the government to ensure compliance in terms of proper governance for effective running of schemes,” he stated.
