A section of Kenya County Government Workers Union (KCGWU) has opposed calls to audit the alleged loss of Sh60billion at Local Authorities Pensions Trust (LAPTRUST) – citing the move as malicious and in bad faith.
KCGWU deputy Secretary General Ms. Matilda Kimetto in a media briefing insisted that no money had been lost, saying such calls do not represent the stand of the National Executive Committee – the union’s decision making organ.
“The entire portfolio of Laptrust and all related entities is Sh56Billion. The SG says Sh60Billion has been lost. Where does he gets his figures? The onslaught against Laptrust is ridiculous and baseless allegations,” said Kimetto while addressing journalists on Friday.
This is after the Union’s Secretary General Roba Duba – representing another section of KCGWU last week claimed that Sh60billion had been defrauded by the fund’s management. Duba, who has been at loggerheads with a section of the union, in a statement further called for Laptrust board members and its Chief executive officer Hosea Kili to leave office until an audit verdict is made public.
“We call for the chief executive officer and the board members of Laptrust to step aside pending the audit to ensure the exercise is carried out without undue influence,” he was quoted last week.
Kimetto’s remarks are the latest fuel to be added to the fierce debate on the decision by the government to classify pension schemes for all civil servants, including the Laptrust and County Pension Fund (CPF) that handle county workers’ annuities, as state corporations.
In July this year, the Head of Public Service Joseph Kinyua directed the schemes to submit their budgets and comply with Treasury’s guidelines on bank accounts, surpluses, borrowings and expenditure in a letter also copied to Treasury CS Ukur Yatani, Devolution CS Eugene Wamalwa and Secretary to State Corporations Advisory Committee Wanjiku Wakogi.
“The National Treasury to ensure a special audit by the Kenya National Audit Office for the purposes of ascertaining the current financial position of Laptrust and affiliate/subsidiary entities and guiding on future,” Kinyua said.
Such a move, according to Ms. Kimetto goes against the country’s Pensions Act which is regulated by Retirement Benefits Authority (RBA).
“We want to emphasize that pension schemes are not state corporations in their set up and their nature. They are statutory trusts owned by the members,” stressed Kimetto, adding that, “Pension schemes do not receive any exchequer funds.”
Such calls had also received opposition from the Council of Governors who last week protested the move and accused the national government of attempting to interfere with the management of county workers’ pension funds.
It is now feared that the ongoing leadership wrangles at the County Workers Union headquarters are derailing efforts to fight for more than its 20,000 members amid other calls to merge the two entities in a new legal arrangement to pave the way for the implementation of the County Governments Retirement Scheme Act, 2019.
The Act seeks to reduce benefits of members arising from reduced contribution rates which the workers say contravenes various laws including Retirement Benefits Act, County Governments Act and their Collective Bargaining Agreements (CBAs).
If passed, the law will see all pension schemes covering county government workers including the County Pension Fund (CPF) merged into one entity. But court battles have hindered the consolidation of the pension schemes, leaving them running independently. The union has however, welcomed the merger plans.
The union also argued that parallel operations by the two schemes were a waste of the workers’ money. The schemes have differed on various issues, key among them the process that would be used to select a board of trustees.
Laptrust DB Scheme closed its doors to new members in 2011 and in a new Defined Contribution Scheme, Laptrust (Umbrella) Retirement Fund, was registered to meet the retirement needs of new employees within the then Local Authorities of Kenya.
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