Treasury CS John Mbadi/HANDOUTThousands of retired and serving county workers face uncertainty after unpaid pension deductions by county governments rose to Sh115.7 billion.
The development comes as senators accuse counties of frustrating efforts to resolve the crisis.
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National Treasury CS John Mbadi, during a meeting with the Senate County Public Investments and Special Funds Committee, told senators that counties were dragging their feet in providing crucial information needed to resolve the matter.
Mbadi said a multi-agency task force investigating the outstanding pensions was yet to complete its work after most counties failed to cooperate.
As a result, Mbadi sought a four-month extension of the task force’s term. The request was rejected by the committee.
The committee said counties had been given enough time to validate the outstanding liabilities, but many had failed to cooperate.
“We cannot continue extending its mandate because some governors failed to respond. The Senate can now take up the outstanding matters directly,” session chairman Eddy Oketch said.
Mbadi told the committee that county pension liabilities had risen from Sh21.3 billion, inherited from the defunct local authorities before devolution, to Sh115.7 billion as of October 31, 2024.
County executives account for Sh103.2 billion of the debt. Water service providers owe Sh9.3 billion, while county assemblies owe Sh3.2 billion.
Only 10 county executives and nine county assemblies had validated their pension liabilities by June 18, 2026, despite repeated requests from the task force.
Oketch accused county governments of delaying the process and frustrating efforts to safeguard workers’ retirement benefits.
For instance, the committee heard that Nairobi Governor Johnson Sakaja met the task force on April 8, 2025, and promised to consult his technical team before responding.
However, no feedback was received.
The Mombasa governor failed to attend a scheduled meeting despite receiving a formal invitation and several follow-up calls.
The pension arrears have left thousands of county workers and retirees fearing delays in accessing their retirement benefits.
The unpaid deductions also deny workers the investment returns that accrue when contributions are remitted on time.
Committee member George Mbugua faulted counties for using workers’ pension money to finance other operations.
“Pension deductions belong to workers. Once the money is deducted from an employee’s salary, it must be remitted to the pension scheme immediately. Keeping it exposes workers to uncertainty and undermines their retirement security,” Mbugua said.
CS Mbadi admitted that consultations with some counties remained incomplete, but agreed that the task force should not continue indefinitely.
“The task force submitted its report, but some critical engagements, particularly with Nairobi and Mombasa, remained inconclusive.
“Nevertheless, task forces cannot exist in perpetuity and the Treasury will provide the committee with the report and all supporting correspondence within the agreed period,” Mbadi said.
The committee directed the Treasury to resubmit the task force report, together with all correspondence exchanged with counties, pension schemes and other stakeholders, within 14 days.
It also ordered the Treasury to submit the proposed debt-settlement agreement once it receives legal clearance from the Attorney General.
INSTANT ANALYSIS
The Senate’s intervention shifts the spotlight from delayed pension reforms to county accountability. With unpaid pension deductions now standing at Sh115.7 billion, thousands of county workers risk delayed or reduced retirement benefits despite regular salary deductions.
The committee’s refusal to extend the task force signals growing impatience with governors accused of frustrating investigations.
If counties fail to settle the arrears, the dispute could trigger legal action, deepen labour unrest and expose weaknesses in financial management under Kenya’s devolved system.
