County employees could gain stronger protection for their retirement savings under proposed laws that would place new obligations on employers and give workers clearer rights over their pension benefits.
The changes now before Parliament seek to tackle the long-running problem of unpaid retirement contributions by county governments, with billions of shillings owed leaving both serving employees and retirees unsure about the money due to them.
The County Governments Retirement Scheme Bill, 2026, proposes a new retirement arrangement for eligible county state officers, public officers and employees.
Under the proposed scheme, workers would be required to save at least 7.5 per cent of their pensionable emoluments.
County governments and other sponsors would also be required to make contributions towards the retirement savings of their employees.
Their contribution would be capped at either twice what the employee contributes or 20 per cent of the worker's pensionable emoluments, whichever is lower.
The proposed law would further give pension payments priority over other county financial obligations by requiring contributions owed by county governments to be charged directly to the County Revenue Fund as a first charge.
This provision is intended to address a situation where pension deductions have had to compete with other spending needs within county governments.
The proposed changes come against the backdrop of a pension crisis facing counties, where billions of shillings in retirement contributions remain unpaid. The situation has created uncertainty for workers and retirees seeking to establish whether their retirement benefits have been properly funded.
The Bill also provides for action against sponsors who fail to remit contributions within the required period.
Any contribution that remains unpaid after the prescribed period would attract interest. The outstanding amount, together with the interest, would then be treated as a civil debt that could be recovered from the sponsor.
The proposed retirement arrangement would also give workers immediate ownership of their benefits.
A member's benefits arising from statutory contributions as well as personal contributions would vest immediately in the worker under the proposed system.
A second Bill before Parliament, the Local Authorities Provident Fund (Amendment) Bill, 2026, seeks to make changes to the existing Local Authorities Provident Fund.
The Bill proposes to convert the fund into the County Governments Retirement Fund as part of efforts to bring it in line with the devolved system of government.
The proposed changes could reshape how retirement savings for county workers are managed by creating a fund that is aligned with the current county government structure.
The two Bills therefore seek to set a clearer framework for retirement contributions by county employees and their employers while also addressing the handling of benefits when workers leave service.
They would also place greater responsibility on county governments and other sponsors to ensure retirement contributions are paid on time.
If enacted, the proposed measures would provide county workers with defined contribution levels, greater protection for unpaid pension deductions and immediate vesting of benefits from statutory and personal contributions.