Each MP to pocket Sh6 million in pension deal

This is expected to cost the Parliamentary Pensions Scheme at least Sh2.2 billion

In Summary
  • One-term lawmakers will each pocket Sh5.8 million while those serving more than one term will walk away with Sh7.8 million
  • At least 417 lawmakers to benefit
Parliament Buildings
LEGISLATIVE HOUSES: Parliament Buildings
Image: FILE


MPs will take home a cumulative Sh2.2 billion in pension payment when  their tenure ends on August 8.

A Parliamentary Pensions Scheme report shows that each member of the National Assembly and Senate will benefit from the package according to the number of terms served. 

One-term lawmakers will each pocket Sh5.8 million, while those who have served more than one term will be entitled to a full pension amounting to Sh7.8 million.

The National Assembly consists of 349 members both elected and nominated.

The speaker serves as an ex-officio member.

The Senate on the other hand has 67 elected and nominated senators.  This brings the total in the two houses to 416 members.

The pension plan introduced in 1986 by the Parliamentary Service Commission (PSC) includes savings calculated at 15 per cent interest per annum.

On top of this, at least 12 members who have served more than one term will receive a monthly stipend of Sh180,000 per month for life besides their full pension payment.

“Members who have served for one term will be entitled to Sh5.8 million from the scheme while those who have done more than one (term) will get their pension,” the National Assembly Clerk Michael Sialai said.

This comes at a time when the government is struggling to cut the wage bill which currently takes 48.1 per cent of revenue against the recommended limit of not more than 35 per cent, stipulated in the Public Finance Management Act.

In 2019, the National Treasury resolved to slash the wage bill to 7.5 per cent of GDP a goal that has not been realised.

Last August MPs took control of their pension payments from the Treasury, giving them powers the door to influence their retirement benefits. 

This was after they unanimously approved changes to the Parliamentary Pensions (Amendment) Bill, transferring management of their retirement benefits to the Parliamentary Service Commission.

Under the current arrangement, the Treasury’s pensions department processes all pensions, gratuities and related allowances from the Consolidated Fund.

The proposed law, which sailed through Parliament and now awaits President Uhuru Kenyatta's signature to become law, gives PSC a free hand in determining pension computation and payments.

If enacted, it will give lawmakers powers to choose between making monthly pension contributions and the gratuity payable at the end of each term.

Under the gratuity scheme, MPs will be entitled to an equivalent of 31 percent of their basic pay for the 60-month term without contributing a cent.

Lawmakers who opt to contribute to pension will, however, not get the gratuity but remain in line for a lifelong monthly payout of at least Sh125, 000 should they exit after serving for at least two terms.

In 2020, President Uhuru Kenyatta refused to sign a similar law that could have seen MPs who served from 1984 to 2001 paid Sh100, 000 monthly.