A group of savvy county assembly members have pocketed Sh300 million in pension savings after they opted to enroll in a self-contributory scheme to cushion themselves from financial shocks.
County workers’ pension fund manager, CPF Financial Services says it has already paid 600 ward representatives dues, with the average payout being a lump sum of Sh1.06 million.
The payments come as a relief to county assembly members who have faced a bruising and cash intensive campaign. More than 1,000 MCAs out of the 1,450 elected members losing seats in the General Election.
The pension earnings will also offer a lifeline to the regional assembly legislators as they wait for their gratuity, calculated at 31 per cent of annual basic pay, which is likely to delay as the new county bosses settle into office.
“These members (MCAs) have since claimed and received their payments,” CPF chief executive officer Hosea Kili told Business Daily.
CPF, formerly known as the Local Authority Pension Trust (Laptrust), disclosed the average saving per member was Sh20,000 monthly, about a fifth of ward representatives’ basic pay of Sh105,600 a month.
“It also protects the member from the disadvantage of having to chase payments from new office holders, whose first priority may not be to pay outgoing members,” said Mr Kili.
The counties pension fund is wooing incoming assembly members to enroll in the CPF individual scheme, saying such savings benefit from tax relief, earns interest and prompt payment.
Unlike occupational pension schemes, individual plans are flexible and allow members full access to their entire cash at the end of the term, according to guidelines issued by the Retirement Benefits Authority.