County Governments Retirement Scheme Act

Section 1. Short title Section This Act may be cited as the County Governments Retirement Scheme Act.

Section 2. Interpretation Section a spouse to the deceased;

Section 3. Objects and purpose of the Act. Section 3(1)(a) provide for the establishment of the Scheme; Section 3(1)(b) provide for the payment of retirement benefits to members of the Scheme when they become due; Section 3(1)(c) provide for the social security of members of the Scheme by ensuring that the members save in order to cater for their livelihood during their retirement; Section 3(1)(d) establish a uniform set of rules, regulations and standards for the administration and payment of retirement benefits for members of the Scheme; Section 3(1)(e) establish transitional provisions for existing schemes; and Section 3(1)(f) protect the benefits of the members of the Scheme.

Section 4. Establishment of the County Governments Retirement Scheme Section 4(1) There is established the County Governments Retirement Scheme. Section 4(2)(a) suing and being sued; Section 4(2)(b) taking, purchasing or otherwise acquiring, holding, charging and disposing of movable and immovable property; Section 4(2)(c) entering into contracts; Section 4(2)(d) borrowing and investing money; and Section 4(2)(e) doing or performing all such other things or acts as may be necessary in furtherance of its purpose and functions. Section 4(3)(a) periodic payments through the purchase of annuities; Section 4(3)(b) a lump sum as a commutation of pension or trivial pension in accordance with the RBA Regulations; Section 4(3)(c) income drawdown; Section 4(3)(d) gratuity; and Section 4(3)(e) any other benefit approved by the Board under this Act.

Section 5. Membership of the Scheme Section 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.

Section 6. Board of Trustees of the Scheme Section 6(1) The management of the Scheme shall vest in a Board of Trustees of the Scheme. Section 6(2)(a) the Chairperson elected by the Trustees from among the members under paragraph (c), (d), (e) and (f); Section 6(2)(b) the Principal Secretary responsible for matters relating to finance or a representative; Section 6(2)(c) a person nominated by Council of County Governors; Section 6(2)(d) a person nominated by County Public Service Boards; Section 6(2)(e) a person nominated by County Assembly Service Boards; Section 6(2)(f) four persons from trade unions representing the employees within the county executive; and Section 6(2)(f)(i) four persons from trade unions representing the employees within the county executive; and Section 6(2)(f)(ii) a person from trade unions representing the employees within the county assemblies' service; and Section 6(2)(g) the Chief Executive Officer who shall be an ex officio member and the secretary to the Board with no voting rights. Section 6(3) The vice-Chairperson of the Board shall be elected by the Trustees from among their number. Section 6(4) The Chairperson and vice-Chairperson shall be of the o...

Section 7. Qualifications for appointment of Trustees Section is a citizen of Kenya;

Section 8. Disqualification from appointment as a Trustee. Section has been convicted of a criminal offence, and sentenced to imprisonment for a term of six months or more;

Section 9. Tenure of office Section 9(1) A Trustee shall hold office for a term of three years and may be eligible for re-appointment for a further and final term of three years. Section 9(2) Where a Trustee opts to apply for re-appointment under subsection (1), the re-appointment may be considered based on the performance of the applicant. Section 9(3) The Board shall put in place arrangements to ensure that one-third of the Trustees are appointed in a staggered manner.

Section 10. Removal from office Section 10(1)(a) inability to perform the functions of the office arising out of physical or mental incapacity; Section 10(1)(b) gross misconduct or misbehaviour; Section 10(1)(c) incompetence or negligence of duty; Section 10(1)(d) bankruptcy; Section 10(1)(e) absence from two consecutive meetings of the Board without a reasonable explanation; and Section 10(1)(f) failure to meet the requirements of leadership and integrity set out in chapter six of the Constitution. Section 10(2) Before a Trustee is removed from office under subsection (1), the Trustee shall be given an opportunity to be heard against the intended removal. Section 10(3) Notwithstanding subsection (1), the Authority may remove a Trustee on grounds specified in the Retirement Benefits Act, 1997.

Section 11. Vacation of office Section resigns in writing to the Cabinet Secretary;

Section 12. Filling of vacancy Section Where a vacancy occurs in the membership of the Board under section 10 or 11 , the Cabinet Secretary shall appoint a new Trustee in accordance with the provisions of this Act.

Section 13. Functions of the Board Section formulate policies relating to the Scheme in accordance with the provisions of the Retirement Benefits Act (Cap. 197);

Section 14. Powers of the Board Section 14(1) In the exercise of its functions, the Board shall be accountable to the sponsors and the members of the Scheme. Section 14(2) The Board shall have all powers necessary for the proper performance of the functions of the Scheme under this Act. Section 14(3)(a) supervise the assets of the Scheme in such manner as best promotes the purpose for which the Scheme is established; Section 14(3)(b) appoint a custodian, fund manager and administrator to carry out their functions as specified in the Retirement Benefits Act (Cap. 197); Section 14(3)(c) determine the provisions to be made for administrative expenses as provided for under section 38 and for reserves of the Fund as provided for under section 39 ; Section 14(3)(d) ensure protection, where necessary, of the assets of the Scheme; Section 14(3)(e) associate with any other institution so as to further the purpose for which the Scheme is established; Section 14(3)(f) receive grants, gifts, donations or endowments and make legitimate disbursements from them; Section 14(3)(g) enforce remittance of outstanding Contributions by a sponsor; Section 14(3)(h) invest any monies of the Scheme not imme...

Section 15. Committees of the Board Section 15(1) The Board may establish committees consisting of the Trustees for the better carrying out of its functions. Section 15(2) The Board may co-opt persons to committees established under subsection (1) for a particular reason and such persons shall hold office for such period as the Board may determine. Section 15(3) The persons co-opted into a committee under subsection (2) shall not be more than three. Section 15(4) Subject to any specific or general direction of the Board, a committee established under subsection (1) may regulate its own procedure.

Section 16. Remuneration of Trustees Section The Trustees shall be paid such remuneration as the Authority may determine in accordance with the Retirement Benefits Act (Cap. 197).

Section 17. Meetings of the Board Section 17(1) The business and affairs of the Board shall be conducted in accordance with the Schedule. Section 17(2) Except as provided in the Schedule, the Board may regulate its own procedures subject to compliance with the Retirement Benefits Act (Cap. 197) and the regulations thereunder. Section 17(3) The Board may invite any person to attend any of its meetings and to participate in its deliberations, but such person shall not have a vote in any of its decisions.

Section 18. Chief executive officer of the Scheme Section 18(1) There shall be a chief executive officer of the scheme who shall be appointed by the Board through a competitive recruitment process on such terms and conditions as may be specified in the instrument of appointment. Section 18(2) The chief executive officer shall be an ex-officio member of the Board. Section 18(3)(a) is a citizen of Kenya; Section 18(3)(b) holds a degree from a university recognized in Kenya; Section 18(3)(c) has at least ten years of experience of which five years should be at senior management level in a profession relevant to the functions of the Scheme as may be defined in the Regulations; and Section 18(3)(d) meets the requirements of leadership and integrity set out in Chapter Six of the Constitution. Section 18(4)(a) implementation of the decisions of the Board; Section 18(4)(b) day to day management of the affairs of the Scheme; Section 18(4)(c) management and discipline of the employees of the Scheme; and Section 18(4)(d) any other function that may be assigned by the Board. Section 18(5) The Chief Executive Officer shall hold office for a term of three years and may be eligible for re-appoint...

Section 19. Employees of the Scheme Section 19(1) The Board may engage such other employees as it may consider necessary for the performance of its functions under this Act. Section 19(2) The terms and conditions of service of employees of the Scheme shall be determined by the Board.

Section 20. Common seal of the Scheme Section 20(1) The common seal of the Scheme shall be kept in such custody as the Board may direct and shall not be used except on the order of the Board. Section 20(2) The common seal of the Scheme when affixed to a document and authenticated shall be officially noticed, and unless the contrary is proved, an order or authorization of the Board under this section shall be presumed to have been given.

Section 21. Fund manager Section implement the investment policy of the Scheme as approved by the Board;

Section 22. Custodian of the Scheme Section 22(1)(a) receive the contributions remitted by the sponsors and members under this Act on behalf of the Board; Section 22(1)(b) not later than the next business day following receipt of the contributions from a sponsor, notify the fund manager and the administrator of such receipt; Section 22(1)(c) receive and keep in safe custody the title documents, securities and monies of the Scheme in trust for the members and beneficiaries; Section 22(1)(d) collect dividends for the Scheme; Section 22(1)(e) report to the Board on any matter relating to the assets being held by the custodian on its behalf at such intervals as may from time to time be determined by the Board; Section 22(1)(f) undertake statistical analysis on the investments and returns on investments with respect to funds in its custody and provide data and information to the administrator and the Board; Section 22(1)(g) submit to the Board a report on a quarterly basis, of the reconciliations with respect to the funds held by the Custodian; Section 22(1)(h) execute, on behalf of the Board, the relevant proxy for the purpose of voting in relation to the investments; and Section 22(1)...

Section 23. Administrator Section 23(1) The Scheme shall be administered by an administrator appointed by the Board. Section 23(2) The administrator shall be an employee of the Board. Section 23(3)(a) open and maintain an account for each member; Section 23(3)(b) upon receiving details of the contributions remitted under this Act, cause the amount of the contributions to be credited in the account of the member in respect of whom the sponsor has made the payment; Section 23(3)(c) inform the Board if a member's contribution details differ from the expected; Section 23(3)(d) provide customer support services to members, including access at least on a quarterly basis to members' account balances and statements; Section 23(3)(e) keep and maintain proper books of accounts of the Scheme; Section 23(3)(f) cause to be paid retirement benefits to a member who has retired; Section 23(3)(g) be responsible for all calculations relating to retirement benefits; and Section 23(3)(h) carry out any other functions as may be directed by the Board from time to time. Section 23(4) The administrator shall ensure that all income earned from the investment of the Fund is distributed to the credit of the...

Section 24. Contributions Section 24(1) A member shall, so long as the member remains in the employment of a sponsor, contribute not less than twelve percent of that member's pensionable emoluments to the Scheme. Section 24(2) Every sponsor shall contribute to the Scheme not less than fifteen per cent of the pensionable emoluments of every employee who is a member of the Scheme plus the amounts necessary to cover the premiums for insured benefit. Section 24(3) Subject to such guidelines as the Board may issue, in consultation with the members and sponsors of the Scheme, a member of the Scheme may make additional contributions to the Scheme. Section 24(4) In addition to the contributions specified in subsections (1) and (2), the sponsor shall take out and maintain a life insurance policy that has disability benefits in favour of every member of the Scheme, for a minimum of three times of the member's annual pensionable emoluments. Section 24(5) Upon commencement of this Act, contributions required to be made under subsections (1) and (3) shall be deducted by a sponsor from the salary of the contributor in each month on which the salary is paid and shall be paid into the Scheme toget...

Section 25. Vesting of benefits Section All the benefits derived from contributions by a member and a sponsor shall vest immediately in the member.

Section 26. Withdrawal of membership or benefits Section 26(1) A member shall not withdraw membership or retirement benefit from the Scheme while the member is in the employment of a Sponsor. Section 26(2)(a) resignation; Section 26(2)(b) dismissal; Section 26(2)(c) ill health; Section 26(2)(d) emigration. Section 26(3)(a) where a member leaves employment before one year of membership, the member may opt for payment of his own and the whole of the sponsor's contributions, together with allocated investment income; Section 26(3)(b) his or her own contribution and the sponsor's contribution as may be prescribed by the Retirement Benefits Authority and the investment income that has accrued in respect of those contributions; and Section 26(3)(b)(i) his or her own contribution and the sponsor's contribution as may be prescribed by the Retirement Benefits Authority and the investment income that has accrued in respect of those contributions; and Section 26(3)(b)(ii) the balance shall be retained in the Scheme and continue to accrue interest until the member attains early retirement age, or transferred to another registered Scheme of the members choice; Section 26(3)(c) on grounds of ill...

Section 27. Retirement from service Section 27(1)(a) on attaining the normal retirement age, or where their exact date of birth is not known, on the 1st July in the year in which the Board deems that they have reached normal retirement age; Section 27(1)(b) on the advice of a qualified medical practitioner appointed by the Board certifying that the member is no longer mentally or physically capable of carrying out the functions of their office. Section 27(2)(a) birth certificate; Section 27(2)(b) national identification card; or Section 27(2)(c) a valid passport.

Section 28. Early retirement Section 28(1) Notwithstanding the provisions of section 27 , any member who retires on attaining the early retirement age is entitled to make withdrawals in accordance with section 29 . Section 28(2)(a) birth certificate; Section 28(2)(b) national identification card; or Section 28(2)(c) a valid passport.

Section 29. Payment of retirement benefits. Section 29(1)(a) a lump sum from the balance in his or her retirement savings account that shall not exceed the equivalent of one-third of that balance: Provided that a Member may withdraw any additional voluntary contributions made into the Scheme and accrued interest in full; Section 29(1)(b) monthly or quarterly income drawdown in accordance with a formula prescribed by the Board on the advice of an actuary; Section 29(1)(c) monthly or quarterly annuity for life purchased from an approved issuer of their choice: Section 29(2)(a) assignable or transferable except in accordance with the terms of a mortgage guarantee facility approved by the Board; and Section 29(2)(b) liable to be attached in settlement of any claim. Section 29(3) The payment of a retirement benefits shall commence from the end of the month immediately following the month of the retirement of the member. Section 29(4) Every payment of benefits from the Scheme may be subject to deduction of the amount outstanding due by the member under any mortgage guarantee facility approved by the Board.

Section 30. Particulars of member and dependants of the member Section 30(1) Every member shall provide his or her particulars and those of his or her dependants to the administrator in the prescribed manner. Section 30(2) A member may update the particulars provided under subsection (1) at any time and, in any event, at least three years before retirement.

Section 31. Dispute on nomination Section 31(1) If a dispute relating to a nomination under this Part arises, the Board has power to consider evidence presented and determine the rightful dependant. Section 31(2) Nothing in this Part may be construed as limiting or otherwise affecting the inherent power of the Board, either on its own motion or on the application of a party, to make such decisions as may be necessary.

Section 32. Benefits to be paid upon the death of a member Section If upon the death of a member, benefits are paid to a person validly nominated under this Part, no other person shall have any other claim to the benefits against the Fund.

Section 33. Death of a member in service Section 33(1) Upon the death of a member, the benefits accrued to the member shall be paid to the person whose particulars the Member had provided or at the Board's discretion as otherwise provided in the Retirement Benefits Act and Regulations thereunder. Section 33(2) In the absence of a nomination, the Board shall apply the benefits referred to in subsection (1) to such of dependants of the deceased and in such amounts as the Board shall determine. Section 33(3) Where a dispute arises under this section, the Board shall consider any evidence presented before it and determine the rightful beneficiary.

Section 34. Presumption of death of member Section 34(1) Where a member is missing and it is proved that the member has not been heard of for such period as prescribed by the law relating to presumption of death by those who might be expected to have heard of the member if that member was alive, there shall be a rebuttable presumption that the member is dead as provided under the law. Section 34(2) Where a person is presumed dead under this section, the provisions of section 33 apply.

Section 35. Death of member in retirement Section 35(1) If a member who was receiving a retirement benefit under an income drawdown dies, a benefit that is equivalent to the unutilized balance of the account of the member shall be paid to the nominated beneficiaries of the member. Section 35(2) The payment under subsection (1) shall be made to the beneficiaries either as a lump sum or as an annuity commencing from the day following the death of the member.

Section 36. Prohibited payments from the Scheme Section a member, while the member is still in the employment of a Sponsor except where a member works on a contractual basis for the Sponsor after their resignation or early retirement ; or

Section 37. County Governments Retirement Scheme Fund Section There is established a Fund to be known as the County Governments Retirement Scheme Fund which shall be administered by the Board in accordance with this Act and other relevant written laws.

Section 38. Sources of funds Section 38(1)(a) monies as may vest in or accrue to the Scheme in the performance of its functions under this Act or under any other written law; Section 38(1)(b) contributions from sponsors and members; Section 38(1)(c) grants, gifts, donations or other endowments given to the Scheme; Section 38(1)(d) income from investments made by the Scheme that are approved by the Board; Section 38(1)(e) fees and charges authorized by the Board; Section 38(1)(f) monies earned by the Scheme from any other source; and Section 38(1)(g) monies from any other source provided or donated or lent to the Scheme. Section 38(2)(a) all benefits provided for under this Act; Section 38(2)(b) the expenses incurred in the management and administration of the Scheme subject to the limits provided under this section. Section 38(3)(a) taxes; Section 38(3)(b) the imposition of charges on a public fund or the variation or repeal of any of those charges; Section 38(3)(c) the appropriation, receipt, custody, investment or issue of public money; Section 38(3)(d) the raising or guaranteeing of any loan or its repayment except as provided in any written law; or Section 38(3)(e) matters inci...

Section 39. Reserve account Section 39(1)(a) any special contribution paid into the Scheme by a sponsor or the Government for the purpose of improving the benefits of the members; and Section 39(1)(b) any income of the Scheme that the Board determines should be set aside to stabilize the returns to members subject to a maximum of ten per cent of such income with consideration to the Income Tax Act, (Cap. 470) or regulations made thereunder. Section 39(2) Money shall not be drawn out of the reserve account except as directed by the Board for the purposes provided for under subsection (1). Section 39(3) Any monies determined to be income of the reserve account shall be treated as income forming part of the general income of the Scheme.

Section 40. Annual estimates Section 40(1) Before the commencement of each financial year, the Board shall cause to be prepared estimates of the revenue and expenditure of the Scheme for that year. Section 40(2)(a) payment of the salaries, allowances, and other charges in respect of the employee of the Scheme; Section 40(2)(b) payment of benefits and other charges which are payable out of the funds of the Scheme; Section 40(2)(c) funding of the registration, monitoring and evaluation activities of the Scheme; Section 40(2)(d) maintenance of the buildings and grounds of the Scheme; Section 40(2)(e) funding of training, research and development of activities of the Scheme; Section 40(2)(f) reserve funds to meet future or contingent liabilities in relation to retirement benefits, insurance or replacement of buildings or equipment; and Section 40(2)(g) such other matters as the Board may consider necessary. Section 40(3) The annual estimates shall be approved by the Board before the commencement of the financial year to which they relate. Section 40(4) Expenditure of the Scheme shall not be incurred except in accordance with the annual estimates approved by the Board.

Section 41. Accounts and audit. Section 41(1) The Board shall cause to be kept proper books and records of accounts of the income, expenditure, assets and liabilities. Section 41(2)(a) balance sheet showing in detail the assets and liabilities of the Scheme as at the end of the financial year. Section 41(2)(b) a statement of the income and expenditure of the Scheme during that year; and Section 41(2)(c) such other statements as may be required by the Authority. Section 41(3) The annual accounts of the Scheme shall be prepared, audited and reported upon in accordance with the Retirement Benefit Act and other relevant laws.

Section 42. Financial year Section The financial year of the Scheme shall be the period of twelve months ending on the thirtieth June in each year.

Section 43. Annual distribution of profits. Section The annual investment income earned by the Scheme shall after deduction of all expenses and costs properly paid out of the Scheme and any appropriation to a reserve account approved by the Board be credited to members' accounts on a pro-rata basis.

Section 44. Actuarial review of the Scheme. Section 44(1) The scheme shall be reviewed by an actuary appointed by the Board as provided for in the Retirement Benefits Act. Section 44(2)(a) prepare a report on the state of the Scheme; and Section 44(2)(b) recommend any necessary action to be taken. Section 44(3) The actuary shall submit the report prepared under subsection (2) to the Board within the stipulated time in the instrument of appointment. Section 44(4) The Board shall, within six months of the receipt of such report, consider any recommendations made by the Actuary and in so doing, may take any action recommended by the actuary.

Section 45. Conflict with other written law Section Where there is a conflict between the provisions of this Act and the provisions of the Retirement Benefits Act, the provisions of the Retirement Benefits Act shall prevail.

Section 46. Duty of care Section 46(1)(a) ensure that the Scheme is at all times managed in accordance with the provisions of this Act, the Retirement Benefits Act and any other applicable law; and Section 46(1)(b) take reasonable care to ensure that the management of the Scheme or safe keeping of the assets of the Scheme is carried out in the best interests of the members of the Scheme. Section 46(2)(a) report to the Board and the Authority, as soon as reasonably practicable, any unusual occurrence with respect to the Scheme which in their view could adversely affect the rights of the owner of a member's account under the Scheme; and Section 46(2)(b) report to the Board and the Authority, as soon as is reasonably practicable, if a sponsor has not remitted the required contribution and such remittance remains due for more than ten days.

Section 47. Protection from personal liability Section No action or omission by any member of the Board, or employee of the Scheme shall, if the act was done in good faith for the purpose of carrying out the provisions of this Act or any other law, subject the person to any liability, action, claim or demand.

Section 48. Offences Section 48(1)(a) wilfully fails to remit contributions to the Scheme as required; Section 48(1)(b) knowingly gives false information to the Scheme; or Section 48(1)(c) being a Trustee or employee of the Scheme, wilfully misappropriates the assets of the Scheme, Section 48(2)(a) a director, general manager, secretary of the company or other similar officer of the body corporate; or Section 48(2)(b) purporting to act in any such capacity as provided in paragraph (a), Section 48(3) A person who is convicted of an offence under subsection (1)(c) shall, in addition to any fine that may be imposed, refund to the scheme three times the value of any loss that may be incurred by the scheme by reason of the commission of the offence.

Section 49. Proceedings for recovery of deductions from sponsors Section 49(1) Notwithstanding the provision of section 26 , where a sponsor, having made deduction from a member's emoluments for remittance to the Scheme, fails to remit the contribution within fifteen days of the deduction, the Scheme shall, after giving such sponsor not less than seven days' notice, institute proceedings for the recovery of the deduction. Section 49(2)(a) require the sponsor to pay the sum deducted to the Scheme within seven days of the notice; and Section 49(2)(b) inform the sponsor that if he fails to pay such sum before the expiration of the notice, proceedings for summary recovery of the sum shall be filed in court without further reference to him. Section 49(3) Any sum which is the subject of proceedings of summary recovery under this section shall attract a compound interest at the rate of three per cent per month. Section 49(4) Without prejudice to any proceedings instituted under the provisions of this section, a person who refuses or fails to comply with a notice given to him or her under subsection (1) commits an offence and shall be liable on conviction to a fine not exceeding five milli...

Section 50. General penalty Section contravenes any provision of this Act which is expressly stated to be an offence but for which no other penalty is prescribed; or