A new Bill before the National Assembly proposes replacing the Local Authorities Provident Fund with a new retirement scheme specifically designed for county government employees and state officers.
The Local Authorities Provident Fund (Amendment) Bill, 2026, National Assembly Bill No. 61 of 2026, was published in Kenya Gazette Supplement No. 220 on September 7, 2026.
The proposed legislation seeks to align the retirement framework with Kenya’s devolved system of government by establishing the County Governments Retirement Fund.
If enacted, the law would also rename the existing legislation as the County Governments Retirement Fund Act.
Who would be covered?
The proposed fund would cover a wide range of workers and institutions operating under county governments.
Those covered would include state officers serving in county executives and county assemblies, employees of county public service boards and county assembly service boards, as well as workers employed by county water service providers and county government agencies.
The Bill would also allow other individuals or organisations approved by the Fund’s Board to participate in the scheme.
Under the proposed framework, every contributor would be required to contribute at least 7.5 per cent of their pensionable emoluments to the fund.
The Bill defines pensionable emoluments as basic salary and other allowances that may be agreed upon by employers and employees.
Employers or sponsors would also be required to make monthly contributions, subject to limits provided for under the proposed law.
New board proposed to oversee fund
The Bill proposes the creation of a County Governments Retirement Fund Board to oversee the administration of the scheme.
The board would include representatives from county institutions, water service providers and trade unions.
The proposed governance structure is intended to provide oversight of contributions and the administration of retirement benefits for members covered by the scheme.
The changes would effectively move county workers away from the existing Local Authorities Provident Fund framework and establish a retirement system tailored to the devolved government structure.
How workers would access benefits
The proposed legislation would provide members with several options for accessing their retirement benefits.
These would include periodic payments through an annuity, a lump sum through pension commutation, income drawdown and gratuity.
The Bill would also allow members to access other benefits approved by the Fund’s Board in concurrence with the Retirement Benefits Authority.
The proposed framework is currently at the Bill stage and would still have to go through parliamentary consideration and the other required legislative processes before it could become law.
If approved, the reforms would establish a new legal and administrative framework governing retirement savings for county government employees, state officers and other eligible institutions under the devolved system.
