The Senate Committee on County Public Investments and Special Funds convened today, addressing the escalating pension crisis in Kenya. Under the leadership of Vihiga Senator Godfrey Osotsi, the committee engaged the representatives of The Kenya County Government Workers Union (KCGWU), seeking solutions for the massive pension debt burdening the country.
The cumulative debts owed to the Local Authorities Pensions Trust (LAPTRUST) and the Local Authorities Provident Fund (LAPFUND) currently stand at KES 65.7 billion. The largest contributor to this debt is Nairobi City County, followed by Mombasa, Garissa, and Migori. Besides, several water sector companies have similarly failed to remit pension funds for their employees.
Ali Roba, Secretary General of KCGWU, presented to the committee, attributing the pension debt rise to the onset of devolution and insufficient regulation and enforcement. According to Roba, pension contributions have been poorly managed across the 47 counties, leading to disputes between LAPTRUST and LAPFUND, and consequently, workers are left without retirement benefits.
In response to the crisis, Roba proposed new legislative measures. These include empowering the National Treasury to directly distribute funds to pension schemes and enforcing compliance with remittance of statutory deductions through the Office of the Controller of Budget. Roba also suggested revising the County Governments Act and other regulations to hold office holders accountable for non-remittance of pension funds, an issue predating the era of devolution.
The failure to remit pension dues has caused significant hardship for retirees who are struggling to access their pensions. This situation is exacerbating poverty among older members of society.The union underscored the potential for a loss of workers’ savings if the issue is not urgently addressed, highlighting the need to tackle issues of mismanagement within pension schemes.
Among others invited to make presentations at the hearing were the Intergovernmental Relations Technical Committee (IGRTC), the Retirement Benefits Authority (RBA), and LAPFUND. However, these institutions failed to properly submit their documentation, leading to their exclusion from the session.
The IGRTC and RBA provided incomplete documents and LAPFUND presented unsigned documents, breaching procedural guidelines. Furthermore, LAPFUND is currently without a substantive accounting officer, a necessary requirement for representation before the committee.
The three institutions are slated to attend a follow-up hearing on a later date.
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