CoG rejects retirement bill, says govt has too much power

The Council of Governors (CoG) has rejected the County Governments Retirement Scheme Bill, 2018 and asked Parliament not to enact it, saying it is unconstitutional.

At a public hearing on Thursday, the council told a committee of the Senate that the drafters of the bill gave county governments a peripheral role in the management of the pension scheme, while allowing the national government to take control.

Kisii Governor James Ongwae, who chairs the Labour committee of the CoG, told the Senate Committee on Labour that the bill gives the national government power to manage county employees' retirement benefits, which is against the Constitution.

"NO LOGIC"

Mr Ongwae further said the bill also goes against the Retirement Benefits Act (RBA), which dictates that benefit schemes should be set by employers.

“How can a bill touching on county employees give the national government the role of appointing and managing trustees and deliberately place national players as the majority in a scheme that will oversee the retirement benefits of county workers?

"There is no logic, rationale and policy justification for the national government to arrogate itself such a role,” Mr Ongwae said.

The governor gave his presentation to the committee led by Nairobi Senator Johnson Sakaja after Labour Cabinet Secretary Ukur Yattani, who largely supported the bill while giving recommendations.

Mr Ongwae also said the bill does not appreciate laws that define the roles and functions of national and county governments. 

The CoG also rejected the manner in which the board that will run the scheme was established, arguing it is controlled by the National Treasury.

OVERSIGHT

Section 56 of the bill gives the State Advisory Committee power to oversee the implementation of the scheme.

Mr Ongwae described this proposal as "strange" because the employees in the scheme are exclusively those of county governments.

“The [manner in which the bill was drafted] makes the scheme look like a state corporation yet it should be a statutory pension trust as required by the RBA and other regulations," he said.

"It should therefore be rejected in its entirety or be amended heavily in harmony with existing laws."

BEST PRACTICES

However, the County Assemblies Forum (CAF) sharply differed with the governors, saying it was not the mandate of the CoG to determine the constitutionality of the bill.

“From the onset, it's important to state our position - that unlike the CoG, we agree with the bill in its entirety. Its provisions are in line with the best practices of the public sectors scheme and the RBA in outlining duties, appointment and powers of the board,” said CAF chairman Johnson Osoi.

But the governors and members of county assemblies were unanimous in telling off the Labour ministry, accusing it of seeking control of the process by pushing to be given powers to appoint the scheme's chief executive officer.

“We agreed with CoG that the ministry had no business wanting to appoint the managing trustee. I have heard what the CS has said and we don’t agree with it," said Mr Osoi.

"These are county employees who should not be under the national government's control."

OVERSIGHT

Mr Yatani, in his submission, said that since the scheme largely seeks to address issues of social protection, his ministry should be in the forefront of its implementation.

“There's oversight. This is not a money bill but a social welfare issue. It should not be left to the ministries of Devolution or Treasury. We need a representative from the (Labour) ministry,” he said.

Mr Sakaja said they would harmonise recommendations by all stakeholders as some were in conflict.

“The key point is the need to explore the statutory trust options on how to establish a trust. We don't want the government to dictate what to do to," he said.