The national government has set in motion plans to unlock the impasse surrounding at least Sh85 billion owed to pensioners by counties, a move that could see struggling retirees finally receive their dues.
The latest development comes after National Treasury Cabinet Secretary John Mbadi set up an 18-member multi-agency team to find ways of clearing the pending billions.
The move by CS Mbadi follows a resolution by the Senate to have the Treasury form a team to explore ways of clearing the arrears.
This came after senators approved a report by the Senate County Public Investments and Special Funds Committee, chaired by Vihiga Senator Godfrey Osotsi, which had been inquiring into the huge unremitted deductions.
The committee had asked former Treasury Cabinet Secretary Professor Njuguna Ndung’u to set up a multi-sectoral taskforce to resolve the pension dispute between the pension schemes and the counties.
The committee lamented that efforts to resolve the dispute had been unsuccessful because the Controller of Budget had refused to approve debt swap agreements between counties and pension schemes until the Treasury CS and the Attorney-General had given their approval.
The taskforce on non-remittance of pension deductions to pension schemes by county governments will be led by Albert Mwenda, the head of Budget, Fiscal and Economic Affairs at the Treasury.
"The object of the appointment of the taskforce is to actualise the government’s commitment to the timely remittance of pension deductions to pension schemes by county government entities,” reads a gazette notice issued by Mr Mbadi.
According to the gazette published last Friday, other members of the team include National Treasury director of pensions Albert Kagika, director of intergovernmental fiscal relations Samuel Kiptorus and Bernice Mwangi from the Attorney General's office.
Theodora Ochichi from the Office of the Controller of Budget, David Kitetu from the Intergovernmental Relations Technical Committee and Moses Waitara from the Local Authorities Provident Fund (Lapfund).
They are joined by Jackson Nguthu of the Retirement Benefits Authority, Austine Munene of the County Assemblies Forum, George Okioma of the County Pension Fund (CPF), Christopher Mitei, Isaac Koech of CPF, Legal and Technical Support and Hillary Mwaita of the National Social Security Fund.
Others are Ms Beth Ndung'u from the National Treasury, Mr Joseph Eshiwani from National Treasury Accounting Services, Mr Michael Obonyo from the Treasury's Pensions Department, Mr Joseph Mbatha from Intergovernmental Fiscal Relations Department and Ms Carolyne Mage from the Board of Governors.
Also on the team are Edna Atisa from the Treasury's Intergovernmental Fiscal Relations Department, Ms Faith Pesa from the Treasury's Legal Unit and Mr Bett Bernard from the Intergovernmental Fiscal Relations Department.
The team is tasked with developing strategies to implement the Senate's recommendations on the non-remittance of pension deductions to pension schemes by counties.
“The taskforce will develop an appropriate formula and framework for payment of pension liabilities that will enable the clearance of outstanding pension liabilities by county governments,” Mr Mbadi said in the notice.
County governments have long had a problem with the remittance of pension deductions, with Senator Osotsi saying the challenge is twofold, with non-remittance by defunct local authorities and non-remittance by counties.
The Senate committee, in its report tabled and approved in Parliament, shows that counties are yet to remit more than Sh80 billion to pension schemes as at March 2023.
These include the Lapfund, the Local Authorities Pension Trust (Laptrust) and the CPF.
However, an analysis of data on outstanding pension contributions by the Office of the Controller of Budget shows that the arrears reported by counties differ from those reported by the pension firms.
The combined figures from the schemes show that the devolved units are yet to pay Sh85.05 billion, comprising Sh48.79 billion owed to Lapfund, Sh32.35 billion owed to Laptrust and Sh3.91 billion owed to the CPF.
However, the Council of Governors claims that they only owe the pension schemes Sh40.5 billion as at March 31, 2023 after offsetting Sh13.26 billion from the earlier debt of Sh53.76 billion on March 27, 2013.
The data shows that Nairobi and Mombasa account for over 70 percent of the outstanding transfers, with the City Hall arrears of Sh42.76 billion accounting for 57.8 percent of the total outstanding amount, followed by Mombasa with Sh10.65 billion, representing 14.4 percent.
Other counties with huge outstanding pension arrears are Nakuru (Sh239.89 million), Trans Nzoia (Sh463.13 million), Kiambu (Sh194.16 million) and Busia (Sh218.56 million).
On the other hand, Nyeri, Tana River and Nyamira are the only counties that have cleared their debts with the pension firm.
