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Counties reject bid by State to run Sh60b pension fund

COUNTIES
By Grace Ng’ang’a | September 3rd 2021
Bungoma Governor Wycliffe Wangamati (right) with Tinderet MCA Kipkurui Chepkwony at Council of Governors offices in Nairobi. [David Njaaga, Standard]

Governors and ward reps have opposed a decision by the government to take over the management of the Sh60 billion pension fund for county workers, terming it illegal.

MCAs took issue with the circular by Head of Public Service Joseph Kinyua requiring the Local Authorities Pension Trust (Lap Trust), County Pension Fund (CPF) and county governments staff pension schemes to comply with provisions of the State Corporation Act.

Through the Council of Governors (CoG) and County Assemblies Forum (CAF), they faulted Kinyua’s directive requiring Cabinet secretaries and other national government officials to control the pension schemes.

“LAP Trust and CPF are neither state corporations nor agencies of the national government to warrant the pervasive control and direction embodied in the impugned directives. The CoG and CAF position is that the circulars are unconstitutional, illegal and ultra vires,” reads the joint statement by CoG Human Resources and Social Welfare committee chairman Governor Wycliffe Wangamati (Bungoma) and CAF chairman, Nyandarua County Assembly Speaker Ndegwa Wahome.

“We ask the State Corporation Advisory Committee (SCAC) to refrain from proceeding with the matter until such a time that the two level of governments amicably resolve the issue at hand,” it adds.

The leaders threatened to seek legal redress if the government proceeds with the take over plan.

The government, through the State Corporations Advisory Committee (SCAC) classified pension schemes for all civil servants, including the Lap Trust and CPF, as State corporations.

The classification puts the schemes under the radar of the National Treasury that has been reallocating unspent cash from State corporations to finance the budget.

However, CoG and MCAs have protested the move and accused the national government of attempting to interfere with the management of county workers’ pension cash.

CoG and CAF termed the move another attempt to muzzle the devolved units. Wangamati said Lap Trust and CPF are pension schemes for county staff and do not receive, spend or manage any funds on behalf of the national government. “The national government is not a sponsor or member of any of the two,” he said. 

“It’s also worth noting that a trust is a legal matter that can only be revoked as prescribed by the law and by nothing else,” the governor said.

The county chief said there exists occupational pension schemes for public entities that are managed by trustees without interference from the national government. He wondered why this is any different since “they are also not deemed to be state corporations.”

“The implementation of the circulars will pose a conflict between the trustees and the sponsors of the two. Trustees do not have a duty to obey directives issued by Cabinet secretaries, State corporations advisory committee, or any agencies of the national government,” said Wangamati.

CAF Secretary General Kipkirui Chepkwony said: “These are monies from personal contributions therefore we are worried about what the interest of the State is. It is not going to happen. We are securing our future,” he added.

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