New pension fund for county workers
PHOTO | FILE Bungoma Governor Ken Lusaka (left), Laptrust managing director Hosea Kili (centre) and Murang’a Governor Mwangi wa Iria during a governors’ forum on investments and alternative funding organised by Laptrust.
What you need to know:
- Formerly known as Laptrust, new fund will be known as County Pension Fund
- The new outfit, to be known as the County Pension Fund (CPF), will cater for more than 150,000 members as it transits from catering for employees of the defunct local authorities to embrace the new county governments.
The Local Authority Pension Trust will be transformed into a county fund in line with the country’s devolved governance structure.
The new outfit, to be known as the County Pension Fund (CPF), will cater for more than 150,000 members as it transits from catering for employees of the defunct local authorities to embrace the new county governments.
More than 100,000 workers are expected to join the Trust - popularly known by its acronym LAPTRUST -- as it transits to CPF after nearly a century of catering for local authorities employees.
The Sh22 billion pension scheme currently has 30,000 members but the transition will increase the membership by an estimated 120,000 workers spread across the 47 counties.
The Devolution ministry, the National Treasury and Retirement Benefits Authority (RBA) have endorsed the move, according to correspondence seen by the Sunday Nation.
CHANGES SET TO BE APPROVED
Devolution Secretary John Konchellah has asked the RBA chief executive Edward Odundo to approve the changes from Laptrust to County Pension Fund.
“We are pleased to note that the proposed CPF scheme has obtained approval of the Director of Pensions at Treasury to amend its Trust deeds and rules to enable the scheme to prepare to fit within the new devolved structure,” says Mr Konchellah in a letter dated November 13, 2013.
Laptrust chief executive Hosea Kili says the changes will strengthen the institution to become one of the largest pension schemes in the country.
“This fund has been covering local authorities. We are now aligning it with the needs of county governments. The changes will bring in governors, speakers, county assembly members, county secretaries and staff of all the counties. This will boost the scheme with a Sh22 billion value,” said Mr Kili.
The official said that county state officers who are paid gratuity at the end of their term can also benefit from the fund.
“It is important that they protect themselves from the risks of their money being attached by the incoming regimes at the end of their term, and the only way they can do this is to become members of CPF,” said Mr Kili.
The organisations 5,000 senior citizens receive pension from the fund. The payouts range between Sh3,000 and Sh200,000 a month. “Those earning Sh3,000 retired in the 60s when their monthly salary was Sh1,000. The average pensioners earn Sh40,000 to Sh50,000 monthly,” said Mr Kili. Some of the senior citizens, now retired, currently leave in India and Pakistan.
According to records seen by the Sunday Nation, the scheme offers senior citizens funeral insurance and a National Hospital Insurance Fund (NHIF) card, which covers their spouses.
“If a member dies, Laptrust pays their next of kin three times his or her salary, the spouse gets the pension and gets the funeral insurance. This kind of thing demands that the fund is stable. We are stable and growing,” said Mr Kili.
The Local Authority Pension Trust was established more than 80 years ago.
