The County Assemblies Pensions Scheme Bill, 2024

Background

The County Assemblies Pensions Scheme Bill, 2024, seeks to address the retirement security of county assembly members by establishing a dedicated, standardized, and sustainable contributory pension scheme. Historically, local authority employees and assembly members have been scattered across different schemes. This Bill introduces a unified statutory framework to streamline these pension assets under a newly established Board of Trustees.

Key Amendments

While introducing a fresh statutory framework, the Bill sets up the administrative structures of the scheme:

• Board of Trustees: Governed by Section 6, the scheme's management is vested in a corporate Board of Trustees. The board includes representatives from the Council of Governors, County Assembly Service Boards, and county assemblies.
• Service Providers: Mandates the appointment of professional fund managers, custodians, and scheme administrators to manage, secure, and account for the fund's investment assets.

New Obligations

• Contribution Thresholds: Scheme members must contribute not less than 7.5% of their pensionable emoluments. Sponsors (County Assembly Service Boards) must match this with a contribution of not less than 15% of the member's pensionable emoluments.
• Remittance Deadlines: Sponsors are obligated to deduct and remit contributions within 10 days of the end of the calendar month.
• Record Keeping: Scheme administrators must maintain individual accounts for each member and provide quarterly account balances and statements.

Penalties

• Late Remittance Interest: Any unremitted contribution by a sponsor attracts compound interest at the rate of 3% per month, recoverable as a civil debt.
• Misappropriation and Fraud: Wilful failure to remit, giving false information, or misappropriating Scheme assets constitutes an offense punishable by a fine of up to KSh 5 million, imprisonment up to 5 years, or both.
• Continuing Sponsor Offenses: A sponsor who makes deductions but fails to remit them within 15 days commits an offense and is liable to a fine of up to KSh 5 million (for a body corporate) and a further fine of KSh 1,000 per day for continuing offenses.
• General Penalty: Any general contravention of the Act for which no specific penalty is prescribed is punishable by a fine of up to KSh 100,000, imprisonment for up to 1 year, or both.

Transitional Provisions

• Asset Transfer: Members of the Local Authorities Provident Fund, Local Authorities Pension Trust, and LAPTRUST (Umbrella) Retirement Fund must be transitioned to the new Scheme within one year of the Act's commencement.
• Vesting of Historical Records: All records, assets, liabilities, and duties of county assembly members held by previous local authority funds shall vest in, be imposed on, or be enforceable against the new Scheme.