County Governments Retirement Scheme Act

This Act may be cited as the County Governments Retirement Scheme Act.

Defines "spouse" as "a spouse to the deceased."

Section 3 lists the Act's objects: establishing the Scheme, providing for payment of retirement benefits when due, ensuring members save for retirement livelihood, setting uniform rules for administration and payment of benefits, creating transitional provisions for existing schemes, and protecting members' benefits.

Trustees may be removed from office for specified grounds (including incapacity, misconduct, incompetence, bankruptcy, unjustified absence, or failure to meet leadership and integrity requirements); the Authority may remove a Trustee on grounds in the Retirement Benefits Act, 1997.

Resignation must be in writing to the Cabinet Secretary.

If a vacancy occurs on the Board under section 10 or 11, the Cabinet Secretary must appoint a new Trustee.

The Board must formulate policies relating to the Scheme in accordance with the Retirement Benefits Act (Cap. 197).

The Board must be accountable to the sponsors and members and has all powers necessary to run the Scheme, including supervising assets, appointing custodians and managers, determining expenses and reserves, protecting and investing assets, receiving grants, enforcing contributions, delegating powers, and undertaking necessary activities.

The Board may form committees and co‑opt up to three persons to them; co‑opted persons must hold office for periods the Board decides; committees may regulate their own procedure subject to Board direction.

The Trustees are to be paid remuneration determined by the Authority under the Retirement Benefits Act (Cap. 197).

The Board must conduct its business and affairs in accordance with the Schedule; the Board may regulate its procedures subject to the Retirement Benefits Act and may invite persons to meetings who shall not have a vote.

Section 18 establishes a Chief Executive Officer of the Scheme: the Board must appoint the CEO via competitive recruitment; the CEO is an ex-officio Board member, must perform specified managerial duties, serves a three-year term (with one possible further three-year term), and the Board may remove the CEO on grounds in the instrument of appointment.

The Board may engage additional employees it considers necessary, and the Board shall determine the terms and conditions of service for employees of the Scheme.

The common seal of the Scheme must be kept in custody as the Board directs and may be used only on the order of the Board.

Establishes the County Governments Retirement Scheme.

A county public officer or any other person approved by the Board may become a member of the Scheme under the auspices of a sponsor.

Management of the Scheme is vested in a Board of Trustees whose membership and appointment arrangements are specified, including gender composition rules and that the CEO is an ex officio secretary with no vote.

Trustees must be citizens of Kenya.

A person is disqualified from appointment as a Trustee if they have been convicted of a criminal offence and sentenced to imprisonment for a term of six months or more.

Trustees hold office for three years; they may be eligible for one further three-year term. The Board must stagger appointments so one-third of Trustees are appointed in a staggered manner.

Fund manager implement the investment policy of the Scheme as approved by the Board.

The custodian must hold and manage the Scheme's funds and assets for the Board, perform specified custody and reporting duties (including receiving contributions, notifying the fund manager and administrator, holding title documents, collecting dividends, reporting and analysis, quarterly reconciliations, executing proxies, and other assigned functions), and must not use pension funds or assets in its custody to meet its own financial obligations.

Section 23 designates an administrator (appointed by the Board) to administer the Scheme and lists specific duties of that administrator, including account management, crediting contributions, informing the Board of discrepancies, providing quarterly access to balances, maintaining accounts, paying retirement benefits, performing benefit calculations, carrying out Board-directed functions, and distributing investment income to members' accounts subject to approved fees.

Members must contribute at least 12% of their pensionable emoluments; sponsors must contribute at least 15% of employees' pensionable emoluments plus insured-benefit premiums; sponsors must provide life insurance with disability benefits of at least three times a member's annual pensionable emoluments; members may make additional contributions subject to Board guidelines; sponsors must deduct and remit contributions monthly by the 10th (or another approved date); late sponsor payments attract interest at a Board-specified rate (not below the Retirement Benefits Act rate); the Board may recover unpaid amounts summarily.

Benefits from contributions by a member and a sponsor vest immediately in the member.

Members may not withdraw benefits while employed by a Sponsor; members who leave may in some cases opt for payment of contributions or have balances retained or transferred; the Board must submit its approval to the Authority 14 days before payment when approving benefit payments.

Members retire on reaching normal retirement age, or (if date of birth unknown) on 1 July in the year the Board deems they reached that age; members also retire if a Board-appointed qualified medical practitioner certifies they are no longer capable. Acceptable proof of age includes a birth certificate, national identification card, or valid passport.

Members who retire at the early retirement age are entitled to make withdrawals in accordance with section 29.

Members may withdraw any additional voluntary contributions they have made into the Scheme, plus accrued interest, in full.

Members must provide their own and their dependants' particulars to the administrator; members may update those particulars, including at any time and at least three years before retirement.

If a nomination dispute arises under this Part, the Board has the power to consider evidence and decide the rightful dependant; the Board also retains inherent power to make necessary decisions on its own motion or on application by a party.

If benefits upon a member's death are paid to a person validly nominated under this Part, no other person may claim those benefits from the Fund.

If a member dies, the Board must apply accrued benefits to nominated persons or, if there is no nomination, distribute them among dependants as the Board decides; if there is a dispute the Board must consider evidence and determine the rightful beneficiary.

If a member has been missing and not heard of for the period prescribed by law, there is a rebuttable presumption that the member is dead.

If a member receiving an income drawdown dies, the unutilized account balance is to be paid to the member's nominated beneficiaries, either as a lump sum or as an annuity starting the day after death.

Members must not receive payments from the Scheme while still employed by a Sponsor, except where they work for the Sponsor on a contractual basis after resignation or early retirement.

Establishes the County Governments Retirement Scheme Fund to be administered by the Board.

Section 38 lists sources of funds for the Scheme, authorizes certain administrative deductions and allows the Board to invest surplus monies.

Reserve account consists of (a) special contributions paid into the Scheme by a sponsor or the Government and (b) income the Board determines should be set aside to stabilise returns, subject to a maximum of ten per cent of such income; money may only be drawn from the reserve account as directed by the Board.

The Board must prepare estimates of the Scheme's revenue and expenditure before each financial year and must approve those annual estimates before the year starts; Scheme expenditure may only be incurred in accordance with the Board‑approved estimates.

The Board must cause proper books and records of accounts of the income, expenditure, assets and liabilities to be kept.

The financial year of the Scheme is the twelve-month period ending on 30 June each year.

Annual investment income of the Scheme, after deduction of expenses and any Board‑approved reserve appropriation, must be credited pro‑rata to members' accounts.

An actuary appointed by the Board must review the Scheme, prepare a report and submit it to the Board; the Board must consider recommendations within six months and may take recommended actions.

If there is a conflict between this Act and the Retirement Benefits Act, the provisions of the Retirement Benefits Act prevail.

Duties require ensuring the Scheme is managed according to applicable law and taking reasonable care that management and safekeeping of Scheme assets are in members' best interests; report to the Board and the Authority about occurrences that could affect member account rights and late sponsor remittances over ten days.

Members of the Board and employees of the Scheme are protected from personal liability for acts or omissions done in good faith to carry out this Act or any other law.

Section 48 creates offences including wilful failure to remit contributions, knowingly giving false information, and, for Trustees or employees, wilfully misappropriating scheme assets; conviction for the misappropriation offence requires refund to the scheme of three times the loss in addition to any fine.

If a sponsor deducts a member's contribution but does not remit it within 15 days, the Scheme must (after at least 7 days' notice) start recovery proceedings; the sponsor must pay the deducted sum within seven days of notice; failure to comply is an offence with fines or imprisonment and continuing offences attract a daily fine.

A person who contravenes any provision of this Act that is expressly stated to be an offence, and for which no other penalty is prescribed, is subject to a general penalty.

The Cabinet Secretary may make regulations, in consultation with the Board, to carry the Act's provisions into effect.

Section 52 repeals the Local Authorities Provident Fund Act and revokes the specified Pension Trust Rules and the Laptrust (Umbrella) Retirement Fund Trust Deed and Rules.

Sponsors and members of the Scheme may be exempt from making Tier I contributions to the National Social Security Fund.

Certain eligible employees may transfer their prior contributory pension scheme contributions to the Fund, subject to Regulations made by the Cabinet Secretary.

Members of the Local Authorities Provident Fund and the Laptrust (Umbrella) Retirement Fund shall be transitioned into the Scheme.

Section 56 deems certain former members of Local Authorities funds to be members of the Scheme, keeps specified closed funds closed to new entrants while preserving accrued rights, requires those closed funds to pay pensions and benefits for up to five years, assigns scheme staff to provide administration (subject to suitability), and tasks the Retirement Benefits Authority to implement the section within five years.

Section 57(1) deems eligible permanent and pensionable employees who joined after the first general elections to be members of the Scheme from their date of employment; Section 57(2) allows eligible contractual employees, with sponsor agreement, to opt into the Scheme in lieu of gratuity for their contract term subject to contribution rules in section 24.

Sections 52 and 55 come into effect at the end of five years from the commencement date.

Deletes section 132 of the County Governments Act (No. 17 of 2012).