The Local Authorities Pensions Trust says the 18 billion shillings debt owed to them by county governments is threatening to cripple its operations even as more members continue to retire into the Scheme’s payroll.
The fund says the debt significantly increased after the inception of county governments due to weak inherited remittance frameworks from the defunct local authorities.
Nairobi county government owes the Local Authorities Pensions Trust 12 billion shillings which accounts for 70 percent of the total debt the authority is owed by county governments.
The Local Authorities Pensions Trust says the scheme debt has risen from 6.2 billion shillings in 2014 to the current 18 billion shillings as a result of slow remittance of contributions by the defunct local authorities and delay by county governments in addressing such inherited liabilities.
The Pensions Trust says the counties of Nairobi and Mombasa as well as the Nairobi Water and Sewerage Company are among the largest defaulters.
The workers’ pension body says the huge debt is threatening to cripple its operations making it hard to pay retiring workers their dues.
The pension scheme recorded an increase in fund value by 6.6 percent to 23.9 billion shillings as at December 2016.