Senators propose to merge LAPFUND and LAPTRUST

October 7, 2014
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Committee Chairman Senator Stewart Madzayo said the new body will offer retirement benefits to all county government staff/FILE
Committee Chairman Senator Stewart Madzayo said the new body will offer retirement benefits to all county government staff/FILE
NAIROBI, Kenya, Oct 7 – The Senate Committee on Labour and Social Welfare is proposing the collapsing and merger of the administrative services of the Local Authorities Pension Trust (LAPTRUST) and the Local Authorities Provident Fund (LAPFUND) into the proposed County Retirement Scheme.

Committee Chairman Senator Stewart Madzayo said the new body will offer retirement benefits to all county government staff.

“Discussions that have been going on are to assist the employee in his retirement. Several factors have come in to play, there is a LAPTRUST with a scheme of its own and LAPFUND. We have looked at the law, we have discussed the need to amalgamate and whether all the employees can come under one roof,” Madzayo said when the Senate team met legal experts from SUNY-Kenya (a Legislative Strengthening Program)

The Senators plan to amend Section 57 of the proposed County Retirement Scheme Bill which offers to dissolve the LAPFUND, which is a parastatal created by an Act of Parliament and add a new clause which will give way for the merging its functions by revoking a Legal Notice which sets up LAPTRUST.

“We can provide a transition clause which will allow the respective boards and the employees to serve the remainder of their terms (which is usually three years) as part of the handing over the institutions assets to the new structure,” added Nyandarua Senator Murue Kariuki

LAPTRUST was originally set up to cater for the senior cadre of local authorities staff while LAPFUND was to accommodate the rest of the staff, but members were later allowed to join their preferred scheme.

Senator Madzayo said they intend to hold public hearing with County government workers in all the 47 counties after they differed with a proposal by Council of Governors over the form and structure of a proposed pension scheme.

“It’s in the pipeline, we are going to conduct a public hearing and expect them to give their contributions also, because this emanates from them and they are going to be the beneficiaries,” said the Committee Chairman.

The more than 100,000 County staff fear that the proposed merger could sink their hard-earned retirement savings of about Sh20 billion annually. This figure includes contributions of over 70,000 staff seconded from the national government and from the 32,000 defunct local authorities, as well as the newly recruited county workers.

The Kenya County Government Workers Union (KCGWU) has maintained that the current county staff remain with the pension schemes as they were before, but newly recruited staff can join the proposed County Pension Fund.

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