The Senate is demanding county-specific debt repayment plans and stronger accountability over billions of shillings in unpaid salaries, statutory deductions and pension liabilities, as Early Childhood Development Education (ECDE) teachers and other county workers seek assurance that their money will be protected and retirement benefits honoured.
The Senate Committee on Labour and Social Welfare has called on the National Treasury, the Council of Governors and other senior decision-makers to attend the next round-table meeting and commit to concrete solutions for the mounting liabilities.
The intervention comes as a new automatic remittance system, introduced on July 1, 2026, seeks to prevent further defaults by ensuring pension contributions and other statutory deductions are remitted directly at source when county payrolls are processed.
Appearing before the committee in Machakos on Friday, October 9, 2026, Controller of Budget Dr Margaret Nyakang'o said the system integrates the Integrated Financial Management Information System (IFMIS) with the Central Bank of Kenya's system to facilitate direct remittances.
However, the Senate's immediate challenge is to ensure that preventing new arrears goes hand in hand with a credible plan to settle existing debts.
Counties report billions in outstanding liabilities
The Controller of Budget reported that counties had declared KSh100.24 billion in salary arrears and statutory deductions as of June 30, 2026. This figure covers unpaid salaries and statutory deductions reported across county payrolls.
Separately, Retirement Benefits Authority (RBA) Chief Executive Officer Charles Machira put outstanding county pension liabilities at KSh118.8 billion. The amount comprises KSh17.7 billion in principal, KSh99.1 billion in accrued penalties and an actuarial deficit of KSh2 billion.
The two figures represent different categories of liabilities. The KSh100.24 billion covers declared salary arrears and statutory deductions, while the KSh118.8 billion relates to pension liabilities reported by the RBA chief executive.
The information presented does not establish whether the two categories overlap. They should therefore not be added together and presented as a single debt total without further verification.
Nevertheless, the figures underline the financial pressures facing county governments and the urgency of protecting workers' earnings while addressing outstanding obligations.
ECDE teachers and other county workers face uncertainty
For ECDE teachers and other county employees, the issue extends beyond payroll administration. Statutory deductions are money withheld from their earnings for designated obligations, and failure to remit the funds can undermine the benefits and protections workers expect.
Retirees are particularly exposed when pension obligations remain unsettled. After years of service, they depend on retirement benefits to meet their living expenses, making delayed payments a serious financial concern.
Workers therefore need more than assurances that deductions have been made on their payslips. They need confirmation that the money has reached the appropriate funds and that outstanding obligations are being addressed.
Automatic remittances offer hope but cannot clear historical arrears
The new remittance mechanism is designed to strengthen financial discipline by linking payroll processing with direct remittance through the banking system. By reducing opportunities for deductions to be diverted to other expenditure, it could help prevent fresh arrears.
However, the system cannot automatically clear liabilities accumulated before its introduction. County governments must still verify outstanding debts, allocate adequate resources and establish realistic repayment schedules.
The Senate's call for county-specific plans is therefore central to resolving the crisis. Each county needs to demonstrate what it owes, how the debt will be financed and when outstanding obligations will be settled.
The National Treasury and the Council of Governors are also expected to play a role in developing practical solutions that can be implemented and monitored.
Senate pressed to turn demands into accountability
The proposed round-table meeting offers an opportunity to move the debate beyond the disclosure of debt figures and towards measurable commitments.
Effective follow-through would require transparent reporting, clear repayment timelines and regular verification that statutory deductions are reaching their intended destinations. It would also require counties to distinguish between salary arrears, unremitted statutory deductions and pension liabilities so that each category is addressed appropriately.
For ECDE teachers and other county workers, the immediate concern is whether their earnings and statutory benefits are secure. For retirees, the priority is whether outstanding pension obligations will finally be honoured.
The automatic remittance system could help prevent the problem from worsening, but the historical debt requires a separate and credible resolution.
The Senate's intervention will ultimately be judged by whether county governments produce workable repayment plans, protect current workers' contributions and settle the benefits owed to retirees—not merely by whether a new payroll system prevents future defaults.
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