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{
    "id": 1380140,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1380140/?format=api",
    "text_counter": 320,
    "type": "speech",
    "speaker_name": "Sen. Osotsi",
    "speaker_title": "",
    "speaker": {
        "id": 13588,
        "legal_name": "Osotsi Godfrey Otieno",
        "slug": "osotsi-godfrey-otieno"
    },
    "content": "billion represented accumulated penalties. In case of the debt owed to NSSF by the defunct local authorities, out of the Kshs1.8 billion owed, Kshs1.6 billion represented the accumulated penalties. These penalties are provided for in law as I will demonstrate later. This is also evident in the data submitted in the other pension schemes. For instance, out of the KShs57.5 billion, owed to LAPFUND in respect of pensions, Kshs51.7 billion represented accrued interest and penalties. In the case of LAPTRUST and CPF- which are managed together - LAPTRUST was before devolution and CPF was after devolution. However, the LAPTRUST and FUND still exists. Out of the total pension debts of Kshs33.7 billion and Kshs3.7 billion owed to the two schemes respectively, Kshs23.6 billion and Kshs1.7 billion accounted for accrued interest of the two schemes respectively. Mr. Temporary Speaker, Sir, the fourth observation was that five county governments namely; Nyeri, Tana River, Nyamira, Kakamega and Kwale signed debt payment agreements with CPF and have so far made efforts to offset the debts amounting to over Kshs160 million. Out of the five counties, only Nyamira and Nyeri Counites have fully settled their principal pension contribution. Additionally, Kisumu, Kirinyaga, Makueni, and Bungoma counties agreed on a repayment plan with CPF. There are some counties that have entered into debt repayment plans or agreements with pensions schemes particularly CPF. A few of them have paid and others after signing the agreements have not paid. The fifth observation was that there were shortcomings on the Retirement Benefit Act of 1997 such that it does not adequately support the collection of pension debt by Kenya Revenue Authority (KRA) when it is appointed as a collection agent under the Act. We noted this, that although Retirement Benefits Authority (RBA) has the powers under the law to regulate or manage the pension scheme, they are incapacitated. The law does not give them the power to support the collection of the pension money through KRA. We have proposed amendments in our Report to the RBA Act and KRA Act. The sixth observation was that the stakeholders attributed to the non-remittance of pension contribution to financial challenges; the usual financial challenges that counties talk about. One was the issue of diverted pension contribution to other activities. This was brought out very clearly by the Controller of Budget (COB) that when counties make requisition, they are approved but end up paying another amount. The first casualty in that arrangement is usually statutory deductions such as pension. The other challenge was non-sustainable pension contribution rates in the public sector, changes in employer institutional arrangements, delay in disbursement of funds by the National Treasury and State Department of Economic Planning and also administrative lapses caused by poor record keeping particularly pre-devolution. The other observation was that successful county governments have failed to recognize or honour pension liabilities owed by counties when they came into power. Every governor who has come in has had this problem of not honoring the statutory obligations, including payment of pensions and the National Social Security Fund (NSSF)."
}