10 governors summoned over pension
By Rawlings, April 27, 2023
A Senate watchdog committee has summoned 10 governors and the National Treasury Cabinet Secretary Njuguna Ndung’u as it begins investigation into Sh65.7 billion owed to pension schemes by county governments.
The County Public Investments and Special Funds committee chaired by Vihiga Senator Godfrey Osotsi has commenced an inquiry into the arrears.
The committee wants the inquiry to unlock modalities of clearing the debt that has been pending for decades.
“We want to discuss how counties will pay the debt. It is huge and if we do not act, county employees and those who are already in retirement are going to suffer,” said Osotsi.
Controller of Budget Margaret Nyakang’o, Retirement Benefits Authority chief executive Charles Machira, Intergovernmental Relations Technical Committee chairman Kithinji Kiragu, County Workers Union and Council of Governors have also been summoned to shed light on the huge pension funds still owed.
The committee has issued summonses to 10 governors whose counties owe the highest amount to the pension firms – Local Authorities Pension Trust (Laptrust) and Local Authorities Provident Fund (Lapfund) and County Pension Fund (CPF).
Governors Johnson Sakaja (Nairobi), Abdulswamad Shariff (Mombasa), Ahmed Nadhif Jamma (Garissa), Ochillo Ayacko (Migori), Simba Arati (Kisii), Gladys Wanga (Homa Bay), Ahmed Abdullahi (Wajir), Wavinya Ndeti (Machakos), George Natembeya (Trans Nzoia) and Kawira Mwangaza of Meru owe Laptrust and Lapfund in excess of Sh1 billion each.
According to a report on the pension schemes released by the National Treasury in January, the counties owe the Local Authorities Pensions Trust (Laptrust) Sh31.1 billion, County Pension Fund (CPF) is owed Sh2.59 billion while Local Authorities Provident Fund (Lapfund) are yet to receive Sh31.37 billion as of January 30, 2023.
“Most of the county governments owe money to the various pension funds. However, county governments are not reflecting these pension liabilities in their pending bills stock,” the report states.
The report shows that Nairobi City County owes pension schemes Sh39.66 billion of which Sh15 billion is owed to Lapfund, Sh32.86 million owed to CPF and Sh24.62 billion is owed to Laptrust.
Dead on arrival
In Nairobi county with about 13,000 employees and a good number hitting retirement age every year, several attempts to clear the debt, including a debt swap, have failed.
According to the report, Mombasa owes Sh9.44 billion to the pension firms which comprises Sh5.02 billion owed to Lapfund, Sh146.84 million owed to CPF and Sh4.27 billion owed to Laptrust.
Garissa county owes pension schemes the third highest amount. The report shows that the Nadhif Jama-led government is yet to pay the pension schemes Sh1.83 billion. The debt includes Sh1.62 billion owed to Lapfund, Sh194.10 million owed to CFP and Sh18.15 million that is yet to be remitted to Laptrust.
The three retirement schemes are demanding Sh1.73 billion from Migori county which comprises Sh1.62 million (Lapfund), Sh31.44 million owed to CPF and Sh79.87 million owed to Laptrust.
Kisii county owes Sh1.28 billion comprising Sh1.32 billion (Lapfund), Sh101.77 million (CPF) and Sh51.86 million owed to Laptrust.