Kenyan Pension funds set to merge

 (3 minutes read)

·        The Local Authority Pension Trust (Laptrust) of Kenya and the Local Authority Pension Fund (Lapfund), Kenya  are 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). The pending disputes hindered the consolidation of the pension schemes

·        Till now, the two entities have been operating independently

The Local Authority Pension Trust (Laptrust) of Kenya and the Local Authority Pension Fund (Lapfund), Kenya  are 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).  The pending disputes hindered the consolidation of the pension schemes.   Till now, the two entities have been operating independently.

Recently, representatives of the two schemes, the Retirement Benefits Authority (RBA) and the Kenya County Government Workers Union (KCGWU) appeared before the Senate’s Labor Committee and expressed willingness to engage in discussions to end the standoff. The stakeholders said they would only participate in talks led by a third party and on neutral grounds.

RBA and KCGWU support the merger. The county staff union moved the court after the law was enacted pleading that workers’ interests were ignored in the merger talks.. They also said that parallel operations of the two schemes were leading to unhealthy competition and was a waste of the workers’ money. The schemes have differed on various key issues including the process that would be used to select a board of trustees. The National Treasury and the Senate committee have pledged to engage the parties separately and jointly even as plans to hold the talks are set.

Senate directed the parties to report back in two weeks on the progress of setting up a forum for dialogue. Laptrust was set up to cater to the senior cadre of local authorities’ staff while Lapfund was to accommodate the rest of the staff.  With the liberalization of the market in 2006, members were free to join their preferred scheme. Lapfund was created by an Act of Parliament and Laptrust was set up by a legal notice.