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The Nairobian

Why counties workers may not enjoy their retirement

News

By Benard Sanga | May 02, 2016

Workers risk retiring without any savings as county governments have not been remitting their pension contributions, Treasury has warned.

Treasury Cabinet Secretary Henry Rotich threatened to deduct all county workers' statutory payment from devolved units' allocations by the national government before disbursing the funds.

Mr Rotich said only 16 per cent of the 47 counties had remitted the pension deductions, adding that the other counties were channelling the funds to other uses.

Estimates indicate the over 100,000 county employees contribute about Sh20 billion a year as savings for retirement.

Speaking in Mombasa over the weekend, Rotich said Treasury would not hesitate to act to save county government retirees.

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He warned that counties that have not remitted the contributions as per the Retirement Benefits Regulations timelines risk losing investment on members' savings and accumulating penalties.

Statutory deductions

"We are concerned that counties are not submitting statutory deductions. We will not tolerate that trend and we are reviewing whether we should deduct at source before allocations are disbursed to the counties," he said. The CS said his ministry was discussing the debts owed by the defunct local authorities and a resolution will be reached soon.

Kenya County Government Workers Union Secretary General Roba Duba said Nairobi County government was the worst affected.

"When I was the town clerk there (Nairobi) I was forced to hand over houses because of the arrears to pension schemes," said Mr Duba. The defunct Nairobi City Council handed over Mariakani Estate in South B to Lapfund and Local Authorities Pension Trust.