National Treasury Cabinet Secretary John Mbadi has formed an 18-member multi-agency taskforce. The team is tasked with addressing Sh80 billion in pension arrears owed to various pension schemes by county governments, promising a better future for retired and retiring county staff.
The taskforce, whose creation follows a Senate resolution, will determine the actual pension arrears and develop a strategy to clear them. The resolution was made after the Senate County Public Investments and Special Funds Committee, chaired by Vihiga Senator Godfrey Osotsi, investigated the issue of unremitted pension deductions.
“County governments have a problem with remittance of pension deductions. The problem is two-fold: non-remittance by defunct local authorities and non-remittance by county governments,” Senator Osotsi highlighted during the Senate discussions.
Mandate of the Taskforce
The main objective of the taskforce, according to a gazette notice published last Friday, is to actualize the government’s commitment to ensuring timely remittance of pension deductions to the appropriate pension schemes.
The taskforce will also develop a framework to implement recommendations by the Senate on the issue of non-remittance and create a viable formula for clearing outstanding liabilities. Bi-weekly progress reports will be submitted to the Treasury Cabinet Secretary and the Senate to ensure transparency and accountability.
Members of the Taskforce
The team is chaired by Albert Mwenda, the Director of Budget, Fiscal and Economic Affairs at the Treasury. Other members include representatives from the National Treasury, Office of the Attorney General, Office of the Controller of Budget, Intergovernmental Relations Technical Committee, Local Authorities Provident Fund, and the Retirement Benefits Authority, among others.
Notable members include Albert Kagika, Director of Pensions at the National Treasury; Samuel Kiptorus, Director of Intergovernmental Fiscal Relations; Theodora Ochichi from the Office of the Controller of Budget; and Moses Waitara from the Local Authorities Provident Fund. The Council of Governors is represented by Carolyne Mage, further emphasizing the intergovernmental approach to the issue.
The Arrears Problem
According to the Senate report tabled in March 2023, counties are yet to remit more than Sh80 billion to pension schemes, including the Local Authorities Provident Fund (LapFund), Local Authorities Pension Trust (LapTrust), and the County Pension Fund (CPF).
Data provided by the pension schemes reveal discrepancies in the arrears declared by counties and the figures reported by the schemes. LapFund is owed Sh48.79 billion, LapTrust Sh32.35 billion, and CPF Sh3.91 billion, bringing the total arrears to Sh85.05 billion.
The non-remittance issue dates back to defunct local authorities and has been exacerbated by ongoing delays in remittances by county governments. This has left thousands of retirees in financial distress and jeopardized the sustainability of the pension schemes.
A Roadmap to Resolution
The taskforce’s mandate includes developing a clear strategy for settling the arrears, which could involve negotiations with counties and pension schemes, as well as exploring sustainable funding mechanisms. The aim is to create a predictable framework for pension remittances, ensuring that retirees receive their dues without delays.
A Promising Step
For many retired county workers, the formation of the taskforce represents a beacon of hope. It is an acknowledgment of the gravity of the pension crisis and the government’s commitment to finding lasting solutions.
With regular reporting and a collaborative approach, the taskforce is expected to restore order to pension remittances, improve the welfare of retirees, and set a precedent for accountability in county financial management.
This initiative underscores the government’s resolve to address long-standing issues that affect the livelihoods of public servants and retirees, ensuring a dignified retirement for all.
