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Economy

House, Treasury split over Sh7m lump-sum pay for former MPs

The 11th Parliament in session. FILE PHOTO | NMG
The 11th Parliament in session. FILE PHOTO | NMG 

Parliament is headed for a split with the Treasury after it directed that long serving MPs who lost their seats in the August 8 General Election be offered a send-off pay of at least Sh7 million each and lifelong pension of Sh118,000 per month.

Clerk of the National Assembly and also MPs pension administrator, Michael Sialai, said the House pension committee had last week resolved to offer the generous payout to 45 former lawmakers who failed to secure their seats and had served for at least two terms.

This is against advice from the Treasury, which maintains that the MPs cannot be offered both a minimum gratuity of Sh7 million and lifelong pension as it will amount to payment of two retirement packages.

Mr Sialai said the House Pensions Management Committee, chaired by National Assembly Speaker Justin Muturi, met on November 14 and approved the payments, paving the way for the pensions department under the Treasury to process the retirement benefits.

“They are entitled to receive a pension and will get a minimum of Sh7 million gross of tax in a lump-sum and a monthly pension of Sh118,000 gross of tax,” he said in an interview with the Business Daily on Friday.

Higher pension

He added that about 10 lawmakers who served for more than two terms will get more than the Sh7 million because of their higher pension contributions.

Lawmakers are deducted 12.75 per cent every month for their pension.

The Parliamentary Pensions Act stipulates that only those who serve for two terms are entitled to a Sh125,000 monthly pension for the rest of their lives.

The law provides that a member shall be entitled to a pension if his or her aggregate period of reckonable service is two terms of Parliament and has attained the age of 45.

Those who have served for less than two terms are entitled to a refund of their contribution and annual interest of 15 per cent for period served.

A source at the Treasury said the House Committee figures are not final and talks are still on to determine the pension due to the lawmakers.

’We are still talking and as Treasury will be guided by the law. The law does not provide for both pension and gratuity to be paid at the same time,” said the source who requested not to be named fearing reprisals from Parliament.

But some members of the 10th Parliament, whose term ended in early 2013, managed to walk away with both pension and the gratuity cash — which was previously offered to all MPs who failed to secure their seats.

Lawmakers have more recently become notorious for arm-twisting the Treasury and the SRC to line their pockets with fat pay cheques and perks.

Overpaid

Most Kenyans view their MPs as overpaid.

The MPs have, however, argued that they need high salaries to support poor constituents who often reach out to them for their welfare needs, including school fees and hospital bills.

Some of the long serving MPs include Ababu Namwamba, Paul Otuoma, David Musila, Billow Kerrow, Elija Langat and Gideon Mungaro.

The former MPs — emerging from bruising and expensive campaigns — have been pushing for speedy payment of the cash.

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