County workers risk losing out on pension money following an outstanding remittance of sh 13billion owed to Local Authorities Pension Trust (Laptrust).
The Laptrust group Managing Director Hosea Kili appearing before the Public Accounts committee said that they are ready to settle with the county to clear the overwhelming debts and remit pension money for their employees so as to have smooth operations.
Mr Kili said that the debt has accrued an interest of over sh 5.5billion while the principal contributions amount stands at sh 6billion.
Mr Kili said that the debt dates back to 2010 where the council owed the trust sh 8.6billion with sh 817.27million being the principal contribution, sh 3.73million as penalties and sh 346.78million as contribution in respect to Nairobi City Water and Sewerage Company.
“The reasons why the accumulated penalties are interest are almost the same with the principal remittance is because of the way we charge 1.25 per cent interest in delayed contribution done by the employer,”said Mr Kili.
He told the committee despite several attempts by previous regimes to settle the debt the county ended up defaulting on payment hence trashing the agreements.
The MD said that some of the intervention included an Debt Repayment agreement made in April 2011 where the council and the Trust agreed that the council shall settle the outstanding amount of sh 8.6billion in either through bulk remittance and through property swap.
“The council while maintaining its current contribution of sh 4.5million a day for six days a week and shall pay to the trust a lump sum of sh 2.3million within 45 days, in consideration to that the trust shall waive a sum of sh 1.8billion of the accrued intrest nd penalty” read the agreement in parts.
They would also suggest that the debt would be cleared through a property swapping method that would see the county transfer land/property in full payment of the balance of the debt with a suitable property within Nairobi City worth sh 4.9billion.
The Dr Wilfred Odalo led committee heard that despite the non remittance, City Hall retirees are paid by the Trust from monies collected from other counties.
Mr Kili said apart from the Nairobi County workers having the largest number of retirees the county has continuously defaulted remittance.
In 2017 May,the former Governor Evans Kidero had made another agreement that would see the Trust acquire a property in Kariokor Housing at a cost of sh 3.1billion,Sunken parking sh 1.6billion and BuruBuru housing at sh 1billion.
“The agreement was never implemented as the election period started soon afterwards,” said Mr Kili.