MPs oppose MCA pension bill over county budget concerns
Under the Bill, every MCA would contribute not less than 7.5 per cent of their pensionable earnings, while county governments would contribute not less than 15 per cent.
A legislative proposal to introduce a pension plan for Ward Representatives has run into opposition in the National Assembly, with MPs expressing concern over its financial implications for county governments.
The County Assemblies Pensions Scheme Bill, 2024, seeks to create a contributory retirement arrangement for Members of County Assembly (MCAs), but critics argue it could undermine county development due to the scale of required contributions.
More To Read
- State agencies owe Sh6 billion in unpaid statutory deductions, Treasury warns
- New Bill could allow civil servants to access entire pension upon exit
- Kenya’s pension assets soar to record high, surpassing Sh2 trillion
- Senate calls on MCAs to stand firm against political, financial pressure
- MCAs lose petition challenging scrapping of sitting, retreat allowances
- Teachers who resigned or were dismissed after April 2018 eligible for pension, says TSC
Under the Bill, every MCA would contribute not less than 7.5 per cent of their pensionable earnings, while county governments would contribute not less than 15 per cent.
The sponsor’s share would be deducted monthly from the member’s salary and remitted to the pension scheme.
Any delays in remittance would attract interest, and unpaid amounts would be treated as civil debt recoverable by the board overseeing the scheme.
The proposed pension would be disbursed through various methods, including annuities, lump-sum payments, gratuity, and income drawdowns, in accordance with Retirement Benefits Authority (RBA) guidelines.
MCAs currently enrolled in existing retirement plans such as the Local Authorities Provident Fund or the Local Authorities Pension Trust would be transitioned into the new scheme within 12 months of the Act’s commencement.
However, the National Assembly’s analysis warns that the Bill, if enacted, would place a heavy financial load on counties, potentially forcing them to reduce spending on critical development projects to meet the mandatory pension contributions.
“The Bill is likely to hinder development in counties, considering the quantum of the mandatory statutory obligations, hence necessitating reallocation of resources,” reads the analysis.
The Members of Parliament are also uneasy about the proposed 15 per cent sponsor contribution, noting it exceeds what is required from other public institutions.
The parliamentary experts have flagged this as a key concern, suggesting the Bill may need revisions to avoid straining county finances and service delivery.
Top Stories Today
