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State pension schemes to follow procurement law

pensioners

Guests during a pension trustees and administrators meeting in Nairobi on September 16, 2021. PHOTO | DIANA NGILA | NMG

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Summary

  • Retirement funds of State entities have to follow the government procurement process after the Appeals Court rejected a bid to exempt them from the Public Procurement and Asset Disposal Act.
  • A pension lobby, Association of Retirement Benefits Schemes had filed a case to exempt public pension funds from the procurement law claiming it denied them free right to contract.
  • Public sector procurement is different from private procurement because of the many policies that need to be met before making a final purchasing decision.

Retirement funds of State entities have to follow the government procurement process after the Appeals Court rejected a bid to exempt them from the Public Procurement and Asset Disposal Act.

A three-judge bench ruled that pension funds of State bodies are public entities which operate in cooperation and supervision of the state.

The judges said as such the pension funds have to apply strict procurement guidelines to ensure good governance, integrity, transparency and accountability.

A pension lobby, Association of Retirement Benefits Schemes had filed a case to exempt public pension funds from the procurement law claiming it denied them free right to contract and was discriminatory given private pension funds are not required to follow the procurement process.

“Public entities that undertake procurement of public goods and services cannot be free from State supervision or shielded from liability to be transparent and accountable to their stakeholders, and to the public at large,” the Appeals court ruled.

Public sector procurement is different from private procurement because of the many policies that need to be met before making a final purchasing decision.

Kenya’s public procurement law was established to help guide public entities to identify the most qualified bidder at the least cost to taxpayers.

The law guides timelines for the process, information flow, participation, arbitration mechanism and requires public entities to only undertake procurements that are within their budget.

The pension lobby said following the state process disadvantages state pension funds against their private competition. They said since the same is not applied to private pension schemes then applying the process among state pension funds is discriminatory.

But the judges reasoned that attempts to exempt the state pension funds from the procurement process would create impunity.

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