Pressure is mounting on Nairobi County after the office of the Ombudsman demanded urgent action to settle long standing pension arrears owed to former employees of the defunct Nairobi City Council.
In a statement on Monday, December 15, the oversight body challenged Governor Johnson Sakaja's administration to honour pension obligations inherited from the former local authority.
Among the recommendations was the call for Nairobi County to conduct a joint verification of pension arrears, with Ombudsman urging Nairobi County to work closely with pension administrators and the Office of the Auditor General and Treasury to reconcile outstanding amounts.
The Commission further recommended the prioritisation of pension arrears within the county's budget framework, arguing that the arrears qualified as statutory pending bills and should be treated as mandatory expenditures.
Acknowledging Nairobi County’s financial constraints, the Ombudsman recommended a structured payment plan that would span several years, urging the county to adopt a clear and time-bound schedule to clear the outstanding pension arrears.
On the issue of transparency, the commission called on the county to make known the status of the pension arrears and provide regular updates to pensioners. The county was also urged to consistently publish progress reports through official channels.
While there have been arguments that administrative transitions absolved the county of its obligations, the ombudsman insists that pension liabilities are continuous and survive the restructuring of institutions.
The latest recommendations came weeks after retirees of the Nairobi City Water and Sewerage Company accused their former employer of leaving them in poverty due to the failure to remit statutory pension deductions.
According to the retirees, more than Ksh 4 billion in pension arrears was owed to multiple schemes, leaving hundreds of households living on the edge due to financial constraints.
In November, the Senate Select Committee on County Public Investments and Special Funds (CPISFC) formed a Multi-Agency Taskforce to investigate revelations of significant inconsistencies between pension debt figures reported by counties and those submitted by pension schemes.
The Taskforce was assigned to reconcile and harmonise the exact amounts owed, including the principal amount, accrued interest, and accumulated penalties, ensuring calculations align with the law that established each scheme.
The committee wants the taskforce to finalize a viable payment formula that the National Treasury, the Council of Governors, and the Pension Schemes can agree on.
