NAIROBI, Kenya – A new Bill seeking to establish a pension plan for Members of County Assemblies (MCAs) has hit resistance in the National Assembly, with lawmakers warning it could impose a heavy financial burden on county governments and hinder local development.
The County Assemblies Pensions Scheme Bill, 2024 proposes the creation of a contributory retirement system for ward representatives, but legislators and policy analysts argue that the cost of implementing the plan could divert essential resources from county projects and service delivery.
Under the Bill, every MCA would contribute a minimum of 7.5% of their pensionable earnings, while county governments—the sponsors—would contribute no less than 15%.
The sponsor’s share would be deducted from county budgets and remitted monthly to the pension scheme, with delays attracting penalties and interest.
Unpaid contributions would be treated as civil debt recoverable by the scheme’s board.
Retirement benefits would be disbursed through multiple options, including annuities, lump-sum payments, gratuity, or income drawdowns, all subject to Retirement Benefits Authority (RBA) regulations.
MCAs currently in other schemes, such as the Local Authorities Provident Fund or the Local Authorities Pension Trust, would be transitioned into the new scheme within one year of the law’s enactment.
“Threat to County Development”
A technical analysis from the National Assembly warns that the pension plan could “hinder development in counties,” citing the scale of the financial obligations it would introduce.
Legislators fear that counties—already grappling with budgetary constraints—would be forced to reallocate funds from development initiatives to meet the pension obligations.
“The Bill is likely to hinder development in counties, considering the quantum of the mandatory statutory obligations,” the analysis reads.
MPs have also taken issue with the proposed 15% sponsor contribution, arguing it surpasses the standard contribution rate required from other public bodies, including national-level institutions.
Parliamentary experts are now recommending a revision of the Bill to address financial sustainability concerns and ensure that service delivery at the county level is not compromised.
Pushback Amid Broader Debate on Public Sector Benefits
The proposed pension scheme comes at a time when the Salaries and Remuneration Commission (SRC) is under pressure to rein in excessive benefits in the public sector.
Earlier this year, the SRC rejected a proposal for a lucrative retirement package for judges, and the Senate recently dismissed a request to exempt MCAs from paying Tier II contributions to the National Social Security Fund (NSSF).
With increasing scrutiny on how public funds are spent, the fate of the County Assemblies Pensions Scheme Bill remains uncertain as it undergoes parliamentary review.
