The national and county government are entangled in a vicious fight over the control of county workers’ pension funds.
Council of Governors (CoG) yesterday protested an attempt by the national government to seize control of more than Sh60 billion pension fund for county workers.
According to Head of Public Service Joseph Kinyua, the Local Authorities Pension Trust (Laptrust) is a public entity and should therefore be under the State Corporations Act but governors view this as a scheme by the national government to control the Sh60 billion fund.
“The Laptrust DB Scheme, the County Pension Fund (CPF) and other related entities are exempt entities under Section 2 of the State Corporations Act since they are unincorporated and fall under the Local Government Act (now County Government Act) and the government does not hold any shareholding in the two schemes,” CoG chairman Martin Wambora said in a letter to Kinyua.
In the letter, Wambora warned the national government against interfering in the management of pension schemes for county governments or any other scheme.
CoG Finance Chairman Ndiritu Muriithi said the national government was keen on managing and controlling the wealth created by the pension fund and warned its officials to keep off the schemes.
“CPF is one of the funds that are well managed. It has been growing steadily over the years and has assets of about Sh60 billion. We suspect that it is these assets and cash flows that the national government is targeting,” he said.
In a letter dated July 16 addressed to Treasury CS Ukur Yatani, his devolution counterpart Eugene Wamalwa and State Corporations Advisory Committee Wanjiku Wakogi, Kinyua declared the schemes state corporations following a legal advisory by Attorney General Kihara Kariuki.
“This follows the legal opinion of the Attorney General that affirms that all pension and provident funds are public entities,” reads part of the letter.
Kinyua directed the National Treasury to bring Laptrust and all its affiliate/subsidiary entities to compliance with the PFM Act, PPAD Act and the Public Audit Act.
By the end of the second quarter of the financial year 2020/21, Treasury had managed to collect more than Sh100 billion from regulatory authorities after the performance by the Kenya Revenue Authority to finance government operations was distracted by Covid-19 pandemic.