Governors blame past regimes as pension arrears spiral beyond Sh100 billion, ask treasury to intervene
CoG Chairman Ahmed Abdullahi said he will hold discussions with Deputy President Kithure Kindiki and Treasury Cabinet Secretary John Mbadi on how to address the growing pension debt.
Governors have asked the national government to intervene and offset over Sh100 billion in unpaid pension deductions, which they say were inherited from defunct local authorities and have since spiraled beyond their financial capacity.
The Council of Governors (CoG) has warned that the arrears have accumulated over the years, leaving county staff at risk of retiring without benefits.
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CoG Chairman Ahmed Abdullahi said he will hold discussions with Deputy President Kithure Kindiki and Treasury Cabinet Secretary John Mbadi on how to address the growing pension debt. He admitted that counties cannot pay the arrears under their current revenue allocations and blamed past administrations and oversight agencies for failing to ensure funds were remitted.
“Clearly, this is not what counties can pay under their current equitable share. Mistakes were made and we just have to have bailouts from the government to deal with this situation,” Ahmed said.
The CoG Chairman was responding to Mbadi, who had earlier accused governors and State departments of failing to remit retirement savings for their employees.
Speaking during the closure of the 2025 Devolution Conference in Homa Bay on Friday, Mbadi said data from the Local Authorities Trust Fund, Local Authorities Provident Fund, National Social Security Fund, Public Service Superannuation Fund, and County Pension Fund revealed that county governments owe a substantial portion of the debt.
“Pension debt by county governments has accumulated over the years from Sh23.3 billion relating to the defunct local authorities (pre-devolution), inclusive of accrued deficits, to now over Sh103.2 billion as of October 31, 2024, post-devolution,” Mbadi said.
“This is criminal. If you are supposed to pay salary to your staff and part of that salary is supposed to go to their pension, there is no rationale to pay part of the salary and leave the rest with the county to implement other things or pay for other things.”
He faulted counties for holding on to workers’ contributions, warning that such practices expose public servants to poverty in retirement.
“It is not fair. It is unjust, because this money belongs to people who will one day retire, and as they go home, they want to have something in their pockets. You are killing the future of some individuals,” the CS said.
According to Mbadi, many counties and State agencies deduct money from workers’ salaries with the intention of remitting it to pension schemes, but some governors divert the funds to other projects.
“If you are supposed to pay salary to a staff member and part of that salary is supposed to go to his or her pension, there is no rationale in paying half of the salary and leaving the rest of the salary with you or with the county government to implement other things or to pay other things,” Mbadi said.
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