Blow to ex-councillors as Treasury rules out pension, cites legal frame work

Former councillors who served less than four terms suffered a major blow after the Treasury ruled they cannot be considered for a pension.

National Treasury CS John Mbadi said there is no legal framework to pay the honorarium to the former representatives.

Appearing before the Senate’s Labour Committee, he said only those councillors who served for four terms are covered by a 1994 memo that gave pensions to the representatives.

According to Treasury records, only 328 councillors who served for 20 years continuously are qualified for the payment.  

The move now locks out 11,919 former councillors who have been pushing for the benefits.

“Only 328 were found to have met the requirements, which provided gratuity to those who served four terms or 20 years,” Mbadi said.

“The legal advisory highlighted the absence of a structured formula to determine benefits, given that councillors were not salaried but received allowances that varied across different regions. Consequently, implementing the proposed payment of Sh2,383,800,000 to 11,919 former councillors lacks the necessary legal and policy foundation.”

The CS said most of the former councillors did not receive regular salaries, hence were not contributing to any pension scheme.

Mbadi said compensating them without any legal framework will be in breach of the law.

“It is not possible to implement the honorarium, the Attorney General in a May 8, 2023, advisory stated there is no legal backing for councillors who served less than four terms,” he said.

“As such, implementing the recommendations—particularly for the 11,919 councillors who served fewer than four terms—would amount to creating a new benefit structure without the necessary statutory basis. This would contravene the principles of public finance management and expose the government to potential audit and legal risk.”

Mbadi was appearing before the committee chaired by West Pokot Senator Julius Murgor, to explain on the delayed pension for several government agencies.

Meru Senator Kathuri Murungi had sought to know why the Treasury had delayed the payment despite the parliamentary resolution of 2018.

“We have very tight fiscal space and we are worried as National Treasury of opening floodgates for other people to come and start demanding, remember there are also former MPs, who for some reasons have also been demanding, so where do we reach with this, is also a question but I leave it to policy makers,” he said.

The CS, however, said the National Treasury is considering an alternative approach, which will be done through the Inua Jamii programme to cushion the former councillors.

Mbadi said this will be done together with the State Department for Social Protection to identify those already registered and the registration of those not enrolled.

“The State Department for Social Protection, in collaboration with the relevant government agencies, including the National Treasury, has been verifying eligible registrants into the programme,” he said.

The CS further reiterated that his office is ready to settle compensation for the 328 former councillors identified to be eligible in case they have not been compensated.

INSTANT ANALYSIS

Mbadi said the then Ministry of Local Government had also only limited pension or gratuity payments to councillors who had served continuously for 20 years or more as of December 13, 1993.