The Local Authorities Provident Fund (LAPFUND) has launched an ambitious five-year strategic plan aimed at expanding the retirement benefits scheme fund value to Sh116.8 billion.
The strategic plan (2024-2029), launched on Monday in Kisumu, seeks to onboard an additional 250,000 contributors and enhance collections by pursuing billions in outstanding remittances from county governments and water service providers.
LAPFUND Chief Executive Officer Bernard Mbogo said the scheme is owed Sh27.83 billion by various county governments and water utilities, funds that are critical to sustaining timely payments to retirees.
“Counties continue to deduct pension contributions from employees but fail to remit them to LAPFUND, leaving us in a very awkward position. We have retirees waiting for their dues while the scheme is owed billions,” said Mbogo.
He said to shore up collections, the fund was engaging with the informal sector through tailored campaigns aimed at encouraging voluntary membership and contributions.
Mbogo noted that the drive is expected to boost LAPFUND’s contributions from the current Sh45 billion to Sh64.2 billion by the end of the strategic period, positioning the institution among the leading retirement schemes in the country.
He said the fund also plans to increase investments by 11.55 percent through diversification into real estate, private equities, and other high-yield assets.
“We are targeting a diversified investment portfolio that will maximize returns and enhance the sustainability of the fund,” he added.
Further, LAPFUND was investing in automation and human capital development to enhance operational efficiency, he said.
Mbogo said through these initiatives, the scheme anticipates disbursing Sh39.2 billion in benefits to retirees over the five-year period.
LAPFUND Board Chairman Johnson Osoi said the strategic plan is aligned with the Sustainable Development Goals and supports the government’s broader agenda of enhancing retirement savings.
“The plan emphasizes good governance, transparency, rule of law, and prudent financial management as key pillars to elevate the scheme,” said Osoi.
He identified non-remittance of deductions by counties as the scheme’s biggest challenge, noting that the board intends to engage the Council of Governors (CoG) to formulate a structured debt recovery framework.
“This significant debt portfolio continues to hamper our operations. We are looking forward to the upcoming Devolution Conference to engage the CoG on sustainable solutions,” he said.
Osoi added that LAPFUND would continue investing in real estate and infrastructure as part of its strategy to grow the fund while contributing to housing development in the country.
Kisumu Deputy Governor Dr. Mathews Owili, who at officiated the event, commended LAPFUND for its prudent management of members’ funds and expressed confidence that the new plan would drive exponential growth.
“The Kisumu County Government fully supports LAPFUND’s vision. The strategic plan will undoubtedly elevate the scheme to new heights,” he said.
On the issue of delayed remittances, Dr. Owili cited erratic disbursements from the National Treasury as a major hindrance to timely payments.
“County governments are often cash-strapped due to delays—sometimes exceeding two months—in receiving funds from Treasury. This forces us to prioritize net salary payments, leaving statutory deductions pending,” he explained.
LAPFUND is a defined contribution scheme registered and regulated by the Retirement Benefits Act of 1997 and subsequent regulations.
The State Corporation, which was established in 1960 caters to all employees of county governments and water companies, where members contribute 12 percent while the sponsors contribute 15 percent of the member’s gross salary (basic salary plus house allowance).
Currently LAPFUND enjoys a membership of over 78,000 members spread over all county governments and water & sewerage companies.
The scheme’s fund value as of 30th June 2024 stood at over Sh66 billion in assets.
By Chris Mahandara
