Counties are on the spot for failing to remit employees’ monthly statutory deductions to pension schemes which now stand at Sh65.7 billion, a move that jeopardizes their lives after retirement.
Senators have started an inquiry into how the devolved units accumulated the huge arrears, with 10 governors summoned to appear before a Senate watchdog committee.
The 10 devolved units account for the lion’s share of the debt, standing at Sh58.98 billion, with Nairobi County leading the pack with a whopping Sh39.66 billion, more than half of the outstanding remittances.
Local Authorities Provident Fund (Lapfund) is owed Sh31.37 billion as of January 30, 2023, while the Local Authorities Pensions Trust (Laptrust) remittance arrears stand at Sh31.1 billion.
County Pension Funds (CPF) is owed Sh2.59 billion.
The summoned governors head devolved units with the highest arrears.
They are Mr Johnson Sakaja (Nairobi), Mr Abdulswamad Nassir (Mombasa), Mr Nathif Jama (Garissa), Mr Ochillo Ayacko (Migori), Mr Simba Arati (Kisii) and Gladys Wanga (Homa Bay).
Others are Ms Kawira Mwangaza (Meru), Ms Wavinya Ndeti (Machakos), Mr George Natembeya (Trans Nzoia) and Mr Ahmed Abdullahi (Wajir).
The County Public Investments and Special Funds committee, chaired by Vihiga Senator Godfrey Osotsi, seeks to find out the measures put in place by the county governments to clear the debts that have been pending for decades.
Mr Osotsi said despite most of the devolved units owing the pension schemes billions, they have not reflected these liabilities in their pending bills.
“This debt is huge and if we continue paying lip service, then our county employees and those who are already in retirement are going to suffer. So the meeting with the governors is geared towards finding modalities of clearing the debts,” said Senator Osotsi.
He added that Treasury Cabinet Secretary Njuguna Ndung’u, Controller of Budget Margaret Nyakang’o, Retirement Benefits Authority chief executive Charles Machira and Intergovernmental Relations Technical Committee chairperson Kithinji Kiragu will appear before the committee.
Additionally, the county government workers’ union and the Council of Governors have also been invited to appear before the House team ahead of the start of the inquiry next month.
According to a report presented before the committee, City Hall is in arrears of Sh39.66 billion, with Sh15 billion owed to Lapfund, Sh24.62 billion to Laptrust and Sh32.86 million to CPF.
Nairobi government has more than 13,000 employees, with a largely ageing workforce.
Mombasa government comes second with a debt of Sh9.44 billion, comprising Sh5.02 billion owed to Lapfund, Sh4.27 billion owed to Laptrust and Sh146.84 million to CPF.
Garissa owes the third highest amount at Sh1.83 billion, with Sh1.62 billion owed to Lapfund, Sh18.15 million to Laptrust and Sh194.10 million to CFP.
Migori is next with a debt of Sh1.73 billion, comprising Sh1.62 million owed to Lapfund, Sh79.87 million to Laptrust and Sh31.44 million to CPF.
Kisii owes Sh1.28 billion, including Sh1.32 billion owed to Lapfund, Sh101.77 million to CPF and Sh51.86 million owed to Laptrust.
Homa Bay and Wajir counties owe the schemes Sh1.10 billion and Sh1.09 billion respectively, with the former’s debt comprising Sh1.02 billion owed to Lapfund, Sh32.17 billion owed to CPF and Sh44.79 million payable to Laptrust.
Some Sh560 million is owed to Lapfund by Wajir County, Sh536.35 million (CPF) and Sh3.12 million (Laptrust).
Meru owes Sh1 billion while Machakos and Trans Nzoia owe Sh951.66 million and Sh903.97 million, respectively.
Other counties with huge outstanding remittances are Nandi (Sh576.63 million), Uasin Gishu (Sh558.68 million), and Tharaka-Nithi (Sh478.05 million).
Others are Vihiga (Sh302.32 million), Samburu (Sh250.18 million), Nakuru (Sh267.36 million), Siaya (Sh203.69 million), Kiambu (Sh279.42 million) and Baringo (Sh340.86 million).