Retiring county government workers are staring at a bleak future after revelations the devolved units owed National Social Security Fund Sh4.5 billion in pension deductions.
NSSF CEO David Koross revealed the debt comprises Sh2.7 billion owed by the devolved units and Sh.18 billion owed by the defunct local authorities.
Koross made the revelations when he appeared before the Senate County Public Investments and Special Funds Committee on Thursday.
The committee chaired by Vihiga Senator Godfrey Osotsi is inquiring into the huge outstanding unremitted pension deductions accumulated by the devolved units.
Koross told the Senate committee that they have been making a follow up on outstanding contribution debts owed by county governments.
“Various engagements have been held with the Intergovernmental Relations Technical Committee on recovery of contributions debts owed by defunct local authorities, we call on the Senate to support us to ensure that we are able to recover this debt,” Koross said.
He proposed the reconciliation and validation of amounts owed with respect to defunct local authorities and prompt submission of accurate and complete returns.
He said no county government has instituted a payment plan in the recent months to clear outstanding contribution dues.
Koross said the county governments have been giving priority to payment of contribution arrears and penalties whenever they receive annual disbursements from the National Treasury.
The committee said they will support legislations to compel the employers to be remitting NSSF contributions to the fund as required.
Osotsi said his panel will support any legal proposals or interventions to deter late or nonpayment.
“The Senate is going to support NSSF to be able to get all the pension liabilities owed to by county governments and other defaulters,” Osotsi said.
He added, “We are going to support any legislation that will be brought to the house to make the fund work easier and within the law.
Earlier, Kenya Revenue Authority Deputy Commissioner Esther Wahome told the committee that NSSF, through Retirement Authority, has latitude to appoint the authority to collect unremitted contributions.
Wahome told the committee that NSSF trustees can in writing request the authority as an agent.
This is after demonstrating that they have taken all reasonable effort to recover unremitted contribution from a defaulting employer without success.
She said Kenya Revenue Authority had held engagements with the Retirement Benefits Authority and agreed that collection of unremitted pension contributions is viable by way of agreement with the Trustees of the pension schemes.
“However, it was noted that the legal provisions still had shortcomings that could not enable collection in the manner envisaged," Wahome said.
She added, "As such, there was need to further enhance the provisions of the Retirement Benefits Act and to amend the KRA act, which RBA was to pursue."
