Mombasa County wins KES 2.5 B case against LAPFUND

Mombasa Governor Abdulswamad Shariff Nassir during a meeting with day secondary school headteachers./FILE


A high court in Mombasa has declined to order Mombasa County to pay more than Ksh 2.5Billion non remittance pension fund to Local Authority Provident Fund Board (LAPFUND).

In the ruling by Justice Monica Mbaru the court   struck out the orders by   LAP Fund’s demanding Mombasa County to pay the amount, citing lack of employee’s representation in the claim.

“Accordingly, the claim that the respondents should be ordered to remit Sh2,586,515,277.74 is without good foundation and is hereby struck out. Each party to bear its costs,” said Justice Mbaru.

LAPFUND had sued Mombasa County government and its Chief finance Officer over alleged non remitted pension fund amounting to more than ksh 2.5Billion.

LAPFUND Finance Manager Rhoda Chemashack in her testimony said under Section 132 of the County Government Act (CGA), all members, officers, and staff of a county government subscribe to an existing retirement scheme for officers and staff of local authority and by these provisions, the county must make contributions on behalf of its employees to the retirement authority.

However, Mombasa County failed to remit 27 per cent of the salary for each employee, resulting in a non-remittance of Sh2.586,515,227 as of April 16, 2021.

“That the employees of the county subscribe to and contribute their retirement savings at the rate of 12 per cent of their salary and Mombasa County as the employer matches with a contribution of 15 per cent of the gross salary making total due to the claimant 27 per cent of such salary,” said Chemashack.

On the other hand, Mombasa County government through lawyer Fred Adhoch   denied the allegations saying the county government non-remittance emanates from budget restrictions, shortfalls from the national government and delayed disbursements.

“The alleged non-remittance of Sh2,586,515,227.74 is concerning third parties being Mombasa County employees. The claim is exorbitant and without justification,” said Adhoch.