The Local Authorities Provident Fund (Amendment) Bill, 2026
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
Minimum Employee Contribution Fixed at 7.5%
Every contributor must contribute a sum of not less than 7.5% of their pensionable emoluments to the renamed County Governments Retirement Fund.
Fund Administration Expenses Capped at 2.5%
The administrative and management expenses of the Fund are strictly capped at a maximum rate of 2.5% of the total value of the Fund, subject to rates prescribed by the Board.
Sponsor Contributions Capped at 20%
Sponsoring employers are required to make monthly contributions that do not exceed either twice the employee's contribution rate or 20% of the employee's pensionable emoluments, whichever is lower.
Broadened Retirement Benefit Options
The newly introduced Section 4A specifies that benefits under the Act include:
- Periodic payments through the purchase of an annuity
- Lump-sum commutations of pension or trivial pension
- Income drawdowns
- Gratuities
- Other benefits approved by the Board in concurrence with the Retirement Benefits Authority
Bill No.
No. 61 of 2026
Gazette No.
Supplement No. 220 of 2026
Sponsor
John Kiarie Waweru
Background
The Local Authorities Provident Fund (Amendment) Bill, 2026 seeks to amend the Local Authorities Provident Fund Act (Cap. 272). Its primary objective is to align the principal Act with the Constitution of Kenya, 2010 and the County Governments Act (Cap. 265). It updates obsolete administrative terms, replacing 'local authority' with 'sponsor' and 'Minister' with 'Cabinet Secretary'.
Key Amendments
- Renaming of the Act and Entities: The Local Authorities Provident Fund Act is renamed the County Governments Retirement Fund Act. Correspondingly, the Local Authorities Provident Fund and its Board are renamed the County Governments Retirement Fund and the County Governments Retirement Fund Board.
- Application of the Act: The newly established County Governments Retirement Fund will apply to:
- State officers serving in the county executive and county assemblies;
- Public officers employed by county public service boards, county assemblies service boards, county governments water service providers, or any county government agency; and
- Any person or body approved by the Board who resolves to be bound by the provisions of the Act.
- Board Composition: The restructured Board will consist of:
- A chairperson elected from among the members appointed under county service and trade union representations;
- One person appointed by the Council of County Governors;
- One person appointed by the County Assemblies Forum;
- One person appointed by County Public Service Boards;
- One person appointed by County Assembly Service Boards;
- One person appointed by the most representative association of county government water service providers;
- Four persons appointed by the most representative trade unions representing county government employees (at least three of whom must not be of the same gender); and
- The chief executive officer, who serves as an ex officio member and secretary without voting rights.
New Obligations
- Employee Contributions: Members must contribute a minimum of 7.5% of their monthly pensionable emoluments to the Fund.
- Sponsor Contributions: Sponsoring employers must contribute monthly a sum not exceeding two times the employee's contribution rate or 20% of the pensionable emoluments, whichever is lower.
- Administrative Expense Limits: The Board must limit the management and administrative expenses of the Fund to 2.5% of the total value of the Fund, or a rate prescribed by the Board.
Transitional Provisions
- The Bill deletes several obsolete historical sections of the principal Act, specifically deleting sections 7, 9, 10, and 16 to facilitate transition to the new administrative framework.
No updates tracked yet
Updates will be visible here once they are approved and applied to this bill.