Parliament raids taxpayers to give ex-MPs lavish pension

Taxpayers will have to dig deeper into their pockets to finance a lavish pension windfall for MPs who served between 1984 and 2001.

The National Assembly will vote today to amend the retirement benefits law to award the ex-lawmakers a gratuity and a monthly pension for life.

The changes being proposed to the Parliamentary Pensions (Amendment) Bill, 2019 are likely to easily sail through in the House.

The monthly pension for former MPs will thus rise from the current low of Sh2,000 to as much as Sh125,000.

The payments could be backdated to July 2010 and taxpayers cough millions of shillings to maintain the ex-MPs in retirement.

Should President Uhuru Kenyatta assent to the Bill, some 290 ex-lawmakers will be entitled to a minimum monthly pension of Sh100,000.

The Parliamentary Budget Office (PBO) projected that the government will be paying about Sh15.1 million per month.

With the recommendation to backdate the payments to July 2010, PBO said it would cost about Sh1.76 billion in the first year of implementing the Bill.

“The annual pension payment would amount to approximately Sh180.9 million assuming there are currently about 160 ex-MPs and about 130 widows/widowers,” PBO said.

Under the law, their dependants will be entitled to about half of the set monthly pay for the spouse’s lifetime.

A second category of 80 MPs, who have been excluded from pension yet served for two terms before 2002, will get the handsome payout.

The payments will bring ex-MPs at par with their colleagues who served after 2002 and are entitled to at least Sh125,000 monthly upon serving two terms.

The remaining 80 will get a single payment of Sh11.9 million to date and the Sh100,000 monthly for life.

On Tuesday, National Assembly Minority leader John Mbadi, who sponsored the proposal, defended the Bill as hinged on a noble intention.

He told the Star it is to take care of former MPs currently “earning nothing but are entitled to pension perks”.

The ODM chair said some of the former lawmakers are paid as low as Sh2,000 which can barely cater to their needs, more so healthcare.

“It is to cater to ageing Kenyans who served Parliament and need money for medication. We have seen so many of them dying and we cannot turn a blind eye to their plight,” the Suba South MP said.

Mbadi said he was confident MPs would pass the Bill, having unanimously supported it during the Second Reading.

“We are simply implementing the Akiwumi and the Cockar report,” the Minority leader said.

“We may spend about Sh180 million in the first year and then it will be reducing as many will continue to die as they are ageing.”

On Tuesday, Kipkelion East MP Joseph Limo, then chair of the National Assembly's Finance Committee, said the payments are long overdue.

“That amount compared to our current budget of Sh3 trillion is a drop in the ocean and it is affordable.

“It is not more than Sh20 million per month, but we will have enabled former members to live a decent life,” he said.

Limo spearheaded talks with the Former Parliamentarians Association of Kenya (FOPAK) during his tenure on the committee.

“We have MPs out there who ask for transport from their electorates… this (pension) is not an expensive thing for this country to do,” said Kubai Iringo, MP Igembe Central.

There are concerns about the cost of pension in the country. The 2020-21 budget provides Sh126.5 billion for retirees.

Ndung’u Wainaina, executive director International Centre for Policy and Conflict (ICPC), said the critical question would be if the MPs were contributing to a pension scheme.

“Were those MPs members of a pension scheme then? Were they contributing? You cannot introduce a pension scheme to a person who was not in the first place a member of any scheme,” he said.

Wainaina added: “You cannot pass a law and then apply that law retrospectively to people who never contributed. What would you do with the former councillors who have been pushing for pension? Are we not opening a Pandora’s box?”

The ICPC director said the move presents a legal question, especially since members have a clear limited tenure.

“Their time is limited. They are not civil servants. How then can you become a beneficiary of a lifetime pension scheme? What would be the basis of it?” he asked.

Away from the legal questions, National Treasury Cabinet Secretary Ukur Yatani has lamented challenges posed by the bulging public pension budget.

There are several petitions before the courts challenging the establishment of a county government’s pension scheme.

Budget records show that retired presidents’ benefits have cost the taxpayer above Sh5 billion for the past five years.

Recently, ODM leader Raila Odinga and his Wiper counterpart Kalonzo Musyoka got a plum share of the Sh785 million for retired state officers.

They got Sh594 million each; retired President Mwai Kibaki (Sh147 million) and Vice President Moody Awori (Sh44 million).

The two leaders were allocated Sh200 million each in gratuity as former Prime Minister and former Vice President respectively.

The state has also granted the duo annual pensions of Sh25 million each, which is about Sh2 million per month.

They also have part of their expenses paid for by taxpayers at Sh72 million each.

In today's vote, of interest, though, would be a separate vote on an amendment to the Parliamentary Pensions Act, 2002 to scrap a requirement that MPs who served for two terms should benefit from the lifelong pension.

The net effect of this amendment would also benefit the current crop of legislators who would also be entitled to a lifelong pension even if they serve for only one term.

On Tuesday, Mbadi warned against what he termed as 'selfishly driven' proposals likely to water down the Bill, saying he will reject the push to include single term MPs.

“We should not include first term members of Parliament at this stage because it would need an actuarial assessment for viability.”

Current MPs enjoy a variety of perks including car loans, a Sh20 million mortgage facility and a raft of allowances.

The amendments are in line with the recommendations by the Akilano Akiwumi task force which in 2009 recommended monthly pension.

The Akiwumi report recommended enhanced pension, through improved terms and conditions of service for the MPs and parliamentary staff and Sh100,000 monthly pension for former lawmakers who served from 1984.

Another report by the Cockar task force formed in 2002, recommended that retired leaders who served from 1963 to 1983 be accorded Sh1 million ex gratia.

The team advised that those who served after 1984 – following the enactment of the Parliamentary Pensions Act – get pension.

The Parliamentary Pensions Act, which came into force in 2002, stipulates that only MPs who serve for two terms or more are entitled to a monthly pension of at least Sh125, 000 for the rest of their lives.

Lawmakers who lose elections after serving for one term are refunded the equivalent of three times their monthly pension deductions plus 15 per cent interest for every year served.

However, this category would also be placed on monthly pension with the proposed amendment to remove the requirement for two terms.

But the law did not cover lawmakers who retired before 2002.

FOPAK previously accused the PSC of ignoring sections dealing with the welfare of former legislators.

(edited by o. owino)