The push to consolidate all county retirement schemes into one super fund and secure a better retirement deal for Members of County Assemblies (MCAs) took centre stage on Tuesday as the County Assemblies Forum (CAF) made a strong case before Parliament.
Appearing before the Departmental Committee on Finance and National Planning at Bunge Tower, CAF Chairperson Hon. Seth Mwatela Kamanza called for sweeping reforms to the County Governments Retirement Scheme Bill, 2026, warning that failure to harmonize the existing laws would create confusion, duplication and legal pitfalls.
Mr. Kamanza told the committee chaired by Molo MP Hon. Kuria Kimani that Kenya must end fragmentation in the county pensions sector by merging all existing schemes — the Local Authorities Provident Fund (LAPFUND), the Local Authorities Pensions Trust (LAPTRUST) and the County Pension Fund (CPF) — into one unified County Governments Retirement Scheme.
“Kenya cannot continue running three parallel retirement schemes for the same employer. Fragmentation is expensive, it weakens governance and it denies members economies of scale. We need one strong, consolidated scheme that captures everyone in the county system,” Kamanza submitted.
His submission came as the Finance Committee collected views on the Bill sponsored by the Leader of Majority Party Hon. Kimani Ichung’wa. The Bill seeks to establish a defined contribution retirement scheme for county state officers, public officers and other county employees, with a nine-member Board of Trustees and clear transitional provisions to repeal the LAPFUND Act.
Plight of MCAs
At the heart of Kamanza’s presentation was the plight of MCAs. He warned that the current drafting of the Bill, alongside another separate Bill touching on MCAs’ retirement, creates a dangerous overlap that could leave MCAs in a legal limbo.
“Concurrent inclusion of Members of County Assemblies in two separate Bills creates confusion and potentially conflicting positions. MCAs are elected State officers serving fixed five-year terms. They require a retirement pathway that preserves their current 31 per cent employer gratuity contribution,” he said.
CAF, he argued, is not opposed to a pension scheme, but any scheme for MCAs must recognize that they are not permanent and pensionable staff. He insisted that the 31 per cent gratuity that MCAs currently enjoy must be protected in law.
The Forum also proposed a radical improvement in post-retirement welfare for MCAs — lifetime medical cover for retired MCAs and their spouses, funded through the scheme.
“A retired MCA who has served this country should not be left to beg for medical bills. We are proposing a provision that grants lifetime post-retirement medical cover for MCAs and their spouses. This is about dignity,” Kamanza told the committee.
Consent and Double Deductions
Kamanza further cautioned Parliament against forced transition of members from legacy funds without their consent, citing property rights under Article 40 of the Constitution.
He referenced the landmark ruling in Okoiti & 11 others v CGRS, proposing that Clause 55(1) of the Bill be amended to require individual written consent before any employee is moved from LAPFUND, LAPTRUST or CPF to the new scheme.
“You cannot transfer someone’s lifetime savings to a new entity without their express consent. That would violate their property rights. The transition must be voluntary and protected,” he argued.
On double contributions, CAF asked the committee to cure a loophole that could force counties to contribute to both the new scheme and Tier II of the National Social Security Fund (NSSF).
Kamanza proposed that the word “may” in the exemption clause be replaced with “shall” to make exemption from NSSF Tier II mandatory, not permissive.
“Otherwise you will be forcing the same employer to pay twice for the same employee. That is punitive to counties which are already struggling with wage bills and arrears,” he said.
Support From Other Stakeholders
Kamanza’s call for consolidation was echoed by other stakeholders who appeared before the committee. The Council of Governors, represented by Governors Kahiga Mutahi (Nyeri) and Kenneth Lusaka (Bungoma), also supported institutional succession, asking that the Bill’s long title explicitly state that the new Scheme is the successor to LAPFUND to preserve assets, liabilities and staff.
The Controller of Budget, FCPA Dr. Margaret Nyakang’o, while supporting the Bill, warned that counties spent Sh235.96 billion on compensation in FY 2025/26 — about 42 per cent of their receipts against the 35 per cent legal ceiling. She cautioned that a 15 per cent sponsor contribution could add Sh35 billion annually, and flagged Sh100.24 billion in outstanding salary and statutory deduction arrears as of June 30, 2026.
“Vesting unverified liabilities into the new scheme without valuation or a special audit by the Auditor-General risks carrying them forward unfunded,” Dr. Nyakang’o warned.
The Finance Committee is expected to retreat to consider the views, including Kamanza’s proposals for consolidation, consent-based transition, and enhanced benefits for MCAs, before drafting its final report to the House.