An attempt by the State to take control of county employees’ Ksh60 billion pension fund faces strong opposition from its two administrators – the Local Authorities Pension Trust (LapTrust) and the County Pensions Fund (CPF).
The two administrators have filed a case under a certificate of urgency reading foul in advisories by the Attorney General and terming the plan an illegality. LapTrust Chairman George Kwedho highlighted that administration or management of pension schemes for county government workers falls under the ambit of County Public Service Boards in their respective capacities as the sponsors of LapTrust and CPF.
Further, LapTrust maintain that the approval of Parliament, County Assemblies and the Cabinet is required before they can be converted to public entities. The attempt has also been opposed by the Council of Governors (CoG) and the County Assemblies Forum (CAF).
Attorney General Paul Kihara Kariuki in a legal opinion dated July 16 sought to have LapTrust, CPF and their affiliated companies aligned with the public service, directing government agencies to facilitate the process.
A circular from Head of Public Service Joseph Kinyua also informed LapTrust, CPF and their affiliated companies that they were required to comply with provisions of the State Corporation Act. The move would bring the fund under the control of the national government.
In a statement filed in court, Kwedho referenced a letter from State Corporations Advisory Committee (SCAC) Secretary Wanjiku Wajogi to LapTrust Chief Executive Hosea Kili dated July 26, in which SCAC sought information relating to the fund and its subsidiaries citing the AG’s opinion.
“As is evident from the SCAC Letter and the 1st Respondent’s letter, the Respondents and other officers and agencies of the National Government are hell-bent on implementing the impugned directives despite several fundamental issues of unconstitutionality and illegality,” Kwedho stated.
He accused government agencies of persecuting and sanctioning the schemes on the basis of the AG’s legal opinions, noting that Kariuki had so far issued 3 opinions.
LapTrust began its operations in 1929 as the Kenya local Government Officers Superannuation Fund, a pension scheme for employees of the then Local Government Authorities. It evolved over the years and in 2012 the Laptrust DB Scheme closed its doors to new members.
With the advent of devolution which established 47 county governments in 2013, the County Pension Fund (CPF) was launched. CPF is a contributory retirement benefit scheme for County employees where both the employer and employee contribute for the benefit of the employee.