Laptrust and Lapfund agree to hold talks to end merger standoff
Delegates during a past Lapfund AGM in Mombasa. Lapfund and Laptrust have agreed to iron out their differences in order to clear the way for the implementation of the County Governments Retirement Scheme Act, 2019.
Warring retirement benefits schemes for county government workers — Lapfund and Laptrust — have agreed to iron out their differences in order to clear the way for the implementation of the County Governments Retirement Scheme Act, 2019.
The law was meant to merge Lapfund (Local Authorities Provident Fund) and Laptrust (Local Authorities Pensions Trust) — both of which are retirement schemes managing billions of shillings for employees of county governments into one — as a way to improve the efficiency and management of county workers benefits.
But several court cases filed after the enactment have made it impossible for the law to be implemented after orders that the matters be heard and determined first, leaving the two schemes continuing to run independently.
On Wednesday, the two schemes, the Retirement Benefits Authority (RBA) and the Kenya County Government Workers Union (KCGWU), appeared before the Senate’s Labour Committee where they expressed willingness to engage in discussions that could lead to ending the standoff.
Neutral party
The two schemes, however, maintained that they will only participate in talks led by a neutral party and in a neutral ground, saying that finding a solution without the involvement of a third party will be a tall order.
KCGWU, which wants the two schemes merged, had moved to court after the law was enacted, complaining that workers’ input and concerns were ignored during the developing of the law. The union complained that the continued parallel operation of the two schemes was a waste of workers’ money.
“We will need a merger that joins the two schemes without loss of benefits for members, that which does not hurt. The two schemes are simply duplicating functions and engaging in unhealthy competition. We are agreeable to dialogue that will be held on a neutral ground and handled by neutral parties,” said Matilda Kimetto, representing KCGWU.
End court case
If the parties solve the differences through dialogue, it will end the case currently in court, and whose determination is likely to take months, as well as kick-start the process to merge the two schemes.
The schemes had differed on various issues, among them the process that would be used to select board of trustees for the scheme that will come out of the merger, ending up fighting it out in court. The court prevented the implementation of the law.
Both the National Treasury and the Senate committee have promised to engage the parties individually and together, even as plans to hold the talks continue.
“We will have to frame a formula that will work towards the solution of the standoff,” said the committee chairman, Nairobi Senator Johnson Sakaja.
The parties will return before Senate after two weeks to update the committee on the progress in setting up a forum for engaging in discussions.
