The High Court has overruled the planned merger of pension schemes that were meant to streamline the county governments’ staff pension services due to an oversight by the government in the legislative process.
While quashing the County Governments Retirement Scheme Act, 2019, Justice Maureen Onyango stated that the new law was illegally enacted.
She ruled that there was no public participation and that Parliament failed to involve key stakeholders such as employees and pensioners during the legislative process in 2018.
The Court established that the committee before which the public participation meeting was held was improperly constituted as it did not have quorum as set out under the Standing Orders of the Senate.
Stakeholders in the process were also not given sufficient time to prepare for the meeting.
"There was no sufficient time accorded to stakeholders having been given only one full working day to prepare for the meeting," Justice Onyango noted.
Justice Onyango equally opined that the decision of the national government to get involved in the management of pensions for county government staff was in violation of the constitution.
She explained that the government’s move was against the Fourth Schedule and Article 6 of the Constitution, which provides that the national and county governments are distinct.
“By regulating pension for county government employees, the national government enters into the realm of regulating terms and conditions of service of employees of county governments,” she ruled.
Lapfund has 52,000 members drawn from the county governments according to court papers, with a value of Ksh36 billion.
Beneficiaries of the schemes, such as widows, widowers and dependants of deceased employees and pensioners, whom the Act would directly affect were also not given an opportunity to give their views.
The County Governments Retirement Scheme Act, 2019, also sought to protect savings amounting to billions of shillings held in retirement funds.
In 2021, the Local Authority Pension Trust (Laptrust) of Kenya and the Local Authority Pension Fund (Lapfund), Kenya were in talks over their disputed merger in order to pave the way for the implementation of the County Governments Retirement Scheme Act, 2019.
The said law sought to merge all pension schemes covering county government workers including the County Pension Fund (CPF).
