Governors have opposed an announcement by the Head of Public Service Joseph Kinyua which require Cabinet Ministers and other officers of the National Government to exercise pervasive control and direction on the management and administration of pension schemes for County Government workers.
In a statement, governor Wycliffe Wangamati who serves as the Chairman of Human Resource and Social Welfare Committee termed the announcement as unconstitutional, illegal and ultra vires.
“Laptrust and CPF are neither state corporations nor agencies of the National Government to warrant the pervasive control and direction embodied in the impugned Directives. Laptrust and CPF are pension schemes for the employees of the County Governments as opposed to the National Government,” said Wangamati.
According to Wangamati, Laptrust and CPF do not receive, spend or manage any funds from or on behalf of the National Government to warrant the “pervasive control and direction embodied in the impugned directives.”
He also warned that the National Government is not a sponsor or member of Laptrust or CPF to warrant the control.
“It is our considered view that implementation of the circulars will pose conflicts between the trustees’ fiduciary duties to the members and sponsors of Laptrust and CPF. Further, the trustees do not have a fiduciary duty to obey Directives issued by the Cabinet Secretaries, the State Corporations Advisory Committee or any other agencies of the National Government named in the directives in question,” added Wangamati.
The functions of the National Government by extension the National Treasury is assigned to the Retirement Benefits Authority under Section 5 (d) the retirement Benefits Act which states: “The object and functions of the Authority shall be to— advise the Minister on the national policy to be followed with regard to retirement benefits schemes and to implement all Government policies relating thereto.”
“From the foregoing we caution the State Corporations Advisory Committee to refrain from proceeding with the matter until such a time that the two levels of Government amicably resolve the issue beforehand,” concluded Wangamati.