County governments will now stop remitting their deductions to the National Social Security Fund (NSSF), the Council of Governors has said.
The Council of Governors committee on liaison, management and business on Thursday announced its decision to stop the contributions, to protest the decision by the fund to decline their wish for exemption.
Speaking in a Naivasha Hotel at the end of a two-day retreat, the COG committee in a statement read by its chairperson Mutahi Kahiga (also the CoG vice chairman) sustained their push for better pensions and medical schemes upon leaving office.
“The counties will cease contributing to Tier II under the NSSF Act, Cap 258 as per the exemption under the Act for beneficiaries of a pensions scheme funded out by the Consolidated Fund,” said Mr Kahiga.
He argued that the governors contribute to the Local Authorities Provident Fund towards their pension, and therefore do not need to contribute to the NSSF.
“All the governors are on pension schemes because their contribution goes to the LAP Fund,” said Dr Kahiga.
In addition, the governors are mulling at having the 31 percent gratuity they receive at the end of the ten years term changed to pension payments.
The COG had on January 29 written to the governors directing them not to comply with remitting the contributions to the NSSF.
This was after the NSSF refused to allow exemption from the tier II contributions under the NSSF Act 2013.
The Act provides for two levels of contribution; tier one and two, and gives employers an option of opting out of the latter.
The letter that was authored by the CoG Chief Executive Officer Mary Mwiti demanded, that NSSF issues conditions for the tier II opt out option to be considered one of them being settling of all outstanding debts and obligations owed to the fund.
Ms Mwiti termed the decision by the fund to refuse to grant governors exemption as baseless and unlawful.
Other key resolutions after the meeting include advocating for the reinstatement of Sh400.1 billion as an equitable share, ensuring full transfer of funds for devolved functions, and fast-tracking intergovernmental sector forums and legislative reviews.
After the two day meeting the CoG committee further resolved to enact county legislations, based on the model law developed by the council, to operationalize the financing of the cities and urban areas.
They further agreed to transfer functions to cities and municipalities as well as provide the resources to operationalize urban entities.
For years now the CoG has been pushing for the establishment of a special fund to develop cities and urban areas to improve habitability to cope with growing population and curb spread of slums.
CoG’s Housing and Urban Development Committee chairman Anyang’ Nyongó had earlier proposed the establishment of a national urban development fund to improve the status of the cities and towns.
He lamented that most urban areas are getting raw deal in funds allocation despite them being the centres for revenue generation.
Committee further resolved to ensure the transfer of funds of the recently devolved functions to the county governments in the financial year 2025/26 as resolved at the summit in December.
The two days retreat was aimed at appraising chairs of the CoG committees of the actionable policy and legal issues in devolved sectors
