New team to probe pension billions owed by counties

The Treasury CS John Mbadi (2nd right) and National Assembly Finance and National Planning Committee Chairman Kuria Kimani (2nd left) at Bunge Tower, Nairobi, on November 14, 2024. [Boniface Okendo, Standard]

National Treasury Cabinet Secretary John Mbadi has formed a multi-agency task force to find ways of ensuring timely remittance of pensions by county governments to pension schemes.

This as the government moves to ensure the clearance of pension liabilities currently running into billions of shillings. The move signals hope for thousands of workers whose pensions are not being remitted to pension schemes, setting them up for an uncertain future due to counties’ failure to remit pensions.  

The task force, which will be chaired by the Director-General of the Budget, Fiscal and Economic Affairs at the National Treasury Albert Mwenda, has been tasked with establishing the actual county pension liabilities and developing strategies for implementing the recommendations of the Senate Select Committee on County Public Investments and Special Funds, which aim to unlock the unremitted pension. 

In a Kenya Gazette notice dated November 15, 2024, Mr Mbadi said the task force is expected to develop an appropriate formula and framework for payment of pension liabilities that will enable county governments to clear outstanding pension liabilities. 

Members of the task force are the Director of Inter-governmental Fiscal Relations at the National Treasury Samuel Kiptorus, Bernice Mwangi (Office of the Attorney-General), Theodora Ochichi (Office of the Controller of Budget), David Kitetu (Intergovernmental Relations Technical Committee); Moses Waitara (Local Authorities Provident Fund), Jackson Nguthu  (Retirement Benefits Authority), Austine Munene  (County Assemblies Forum) and George Okioma (County Pension Fund). 

Others are Christopher Mitei (County Pension Fund/Local Authorities Pensions Trust Team Lead), Isaac Koech (County Pension Fund, Legal and Technical Support), Hillary Mwaita (National Social Security Fund), Beth Njeri Ndung’u (National Treasury), Joseph M. Eshiwani (Accounting Services, National Treasury), Michael Obonyo (Pensions Department, National Treasury), Joseph Mbatha (Intergovernmental Fiscal Relations Department, National Treasury) and Carolyne Mage (Council of Governors). The joint secretaries are Edna Atisa (Intergovernmental Fiscal Relations Department, National Treasury), Faith Pesa (Legal Unit, National Treasury) and  Bett Benard (Intergovernmental Fiscal Relations Department, National Treasury). 

“The object of the appointment of the task force is to actualise the government’s commitment to the timely remittance of pension deductions to pension schemes by county government entities,” said CS Mbadi. The task force shall serve for 60 days but is required to submit bi-weekly reports on its activities to the National Treasury Cabinet Secretary and the Senate. 

In March, the Senate had recommended the formation of the task force within 30 days, but then-CS Prof Njuguna Ndung’u did not act on it. The Senate sought the audit after the audit revealed discrepancies between how much pension funds are owed with the Council of Governors giving a lower figure.  

The pension schemes - Local Authorities Provident Fund (LAPFUND) and Local Authorities Pension Trust (LAPTRUST), which has since been renamed County Pension ((CPF) - place the unremitted amount at Sh82.2 billion but governors insisted they had since paid Sh53.8 billion as of March 31, 2023. 

The Sh82.2 billion, committee chaired by Vihiga Senator Godfrey Osotsi said, includes Sh46.9 billion owed to LAPFUND, Sh30.4 billion owed to LAPTRUST and Sh4.9 billion owed to CPF. The arrears include inherited from the 175 defunct Local authorities. However, the Council of Governors said it has paid Sh53.8 billion as of March 31, 2023.