Counties owe Sh17bn in pension fund dues

CPF Financial Services Group Managing Director Hosea Kili says the scheme continues to grapple with outstanding contributions and accruing penalties. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • Debt posing big challenge to the operations of umbrella savings and retirement scheme.
  • The CPF is a retirement benefit scheme for county employees, where both the employer and the employee make contributions.

County governments owe the County Pension Fund (CPF) more than Sh17 billion in unremitted contributions, the Nation has learnt.

This emerged after the retirement fund expressed concern over delays in remittance of pension by the devolved units.

Speaking at a Naivasha hotel on Saturday during an annual general meeting, CPF chief executive officer Hosea Kili said the anomaly was posing a major challenge to the operations of the umbrella savings scheme.

Among the leading defaulters, according to Mr Kili, are Nairobi and Mombasa counties, which he said are dragging their feet in contributing to the fund.

“As at December 2017, the debt stood at Sh17.1 billion, with the larger chunk of the debt being accrued since inception of the counties,” he said.

The CEO noted that the scheme continues to grapple with outstanding contributions and accruing penalties, which constitute the overall debt.

But he said they were engaging the affected counties and the National Treasury to offset the contributions.

He maintained that the delay in remittance has not affected their services, saying the scheme has accumulated enough resources to last them “long enough.”

“We are, however, appealing to the affected counties and the national Treasury to act, because without money in our coffers we shall not be able to realise our investment goals,” he said.

Mr Kili revealed that Nairobi and Mombasa counties, despite the amount they owe the fund, are the leading contributors.

The CPF is a retirement benefit scheme for county employees, where both the employer and the employee make contributions.

Speaking on the sidelines of the AGM, Local Authorities Pensions Trust (Laptrust) board chairperson Calvin Nyachoti said the scheme has realised gradual growth over the past five years, from Sh10 billion to Sh26.5 billion by December 2017.

“The net assets for the year under review increased from Sh23.9 billion in 2016 to Sh26.5 in 2017,” he said.

Mr Nyachoti voiced concern over the unremitted contributions, but added that the board has significantly reduced further build-up of debt by putting in place measures to collect current contributions in full.

He said they were negotiating with some of the top debtors to amicably resolve the issue.