Pension provision for Kenya's county workers hangs in the balance as many counties fail to remit pension contributions to CPF Financial Services Ltd. The shortfall, revealed by CPF/LapTrust's MD Mr. Hosea Kili during a Senate Committee on Public Investment and Special Funds meeting led by Vihiga Senator Godfrey Osotsi, stands at a staggering Kshs 36,284,729,685 as of March 2023. 

High wage bills and cash flow constraints have contributed to this enormous debt affecting schemes including LAPTRUST Defined Benefits Scheme, the County Pension Fund, and the CPF Individual Pension Scheme.

Despite various recovery strategies including property swaps, sponsor engagement, and debt repayment plan negotiations, the debt continues to rise. 

CPF now proposes a Special Bond issuance by the National Government to settle the debt, which could then be recovered from the counties' allocated revenue, proportional to their owed amounts.

This would require legislative action, and CPF is additionally offering an interest and actuarial deficit waiver to counties ready to settle the debt more rapidly.

Counties are at different stages of debt resolution: Nyeri, Tana River, and Nyamira have fully cleared their debts, while others such as Kwale and Kakamega are in process. Some, including Kisumu, Kirinyaga, Bungoma, and Makueni, have agreed on debt amounts but are yet to sign Debt Repayment Plans.

The Committee is taking this issue seriously, as without intervention, the LAPTRUST scheme's cashflow commitments could outstrip the fund value, leading to annual payouts of Kshs 4.1 billion over the next five years. A follow-up meeting has been scheduled for 29th May 2023, to further engage CPF/LapTrust and other stakeholders on finding a lasting resolution to this escalating problem.