• Members of Parliament are presently entitled to a pension only if they have served two terms and have attained the age of 45 years.
• Single-term MPs to get gratuity at 31 per cent of basic pay if the proposed law is assented to by President Uhuru Kenyatta.
Image: FILE
Members of Parliament have embarked on a fresh bid to award themselves fat retirement perks when the term of the current Parliament ends.
In the new push, MPs seek to amend the law to take away National Treasury's power to manage their perks and vest it in the Parliamentary Service Commission.
This way, PSC will determine the estimates for payment of pension, gratuity, refund of contributions and other allowances payable to MPs.
The Parliamentary Pensions (Amendment) Bill, 2019, if passed, would see MPs get gratuity for serving a single term or less.
“A person shall be entitled to receive gratuity where the person ceases to be an MP, has served an aggregate of five years or less,” the Bill sponsored by Mwatate MP Andrew Mwadime reads.
This means the lawmakers will be entitled to 31 per cent of their basic salary for the five years without contributing to any scheme.
The Bill provides that an MP who has served more than one term may elect to be paid gratuity instead of a pension at the end of the term of Parliament which the member is serving.
“A Member of Parliament shall at the beginning of the term of a newly elected Parliament elect to be paid either a pension or gratuity,” the Bill reads.
Gratuity payouts for MPs will rise to Sh1.8 billion when the term of the twelfth Parliament ends – an increase of Sh844 million.
The payments will rise to Sh2.2 billion and Sh2.4 billion in the subsequent fiscal years, with the monthly pension bill set to rise by Sh266 million.
The increase is on account of payment to 196 single-term MPs who lost their seats in 2017, a figure which is expected to go higher following the proposed law change.
Even so, MPs who choose to be paid a pension stand to get a lifetime monthly pay of Sh125,000 should they choose to exit after they serve two terms.
Members of Parliament are presently only entitled to a pension if they have served two terms and have attained the age of 45 years.
In the proposed dispensation, where one ceases to be an MP on grounds of ill-health, the pensions committee shall pay even if the member has not attained 45 years.
President Uhuru Kenyatta has twice slammed brakes on MPs’ bid to review their salaries and allowances without the input of the Salaries and Remuneration Commission.
In the first attempt, MPs sought to review their pay every three years and in the other they sought to bar SRC from varying their salaries.
The President also stopped the payment of Sh100,000 monthly lifetime pension for MPs who served between 1963 and 2001.
Last July, President Kenyatta declined to assent to a Bill establishing a special fund for MPs citing its susceptibility to wastage.
He said MPs could create a fund but have it limited to management of mortgage, car loans, and catering – but not salaries and allowances.
In the new push, MPs who have served for less than one year will have their families or legal representatives paid an amount equal to the annual salary.
Only members who opt to be paid a pension at the end of their term of service will have their contributions deducted from their basic salary.
First-timers who lose their seats will have room to rejoin the pension scheme by repaying all the gratuity, plus three per cent interest covering 15 months.
The other option would be for such a member to “pay contributions for the entire period of non-contribution to match up with existing contributors.”
The deal is being sweetened to provide cover for members’ children up to the age of 18 years from the current limit of 16 years.
Widows and widowers of MPs will receive a pension at the time of the death of the contributor if the latter were entitled to a pension.
“Where a woman who is entitled to receive a pension dies, her widower shall become entitled to a pension.”
MPs have also removed the National Treasury principal secretary and Treasury head as members of the pension management committee.
The committee will be chaired by the National Assembly Speaker with members being Speaker of the Senate, four members of National Assembly and two members of the Senate.
“We are removing excessive involvement of the National Treasury in matters of parliamentary pensions,” Finance committee chairperson Gladys Wanga said.
Garissa Township MP Aden Duale cautioned that removal of the National Treasury from the committee would pose a challenge to the scheme.
“The seat that belongs to National Treasury as leader of all pension schemes is fundamental,” he said.
Edited by Henry Makori