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Economy

One-term MPs to leave with Sh18.8m in pension payoff

A section of Parliament building Nairobi taken on January 6, 2017. FILE PHOTO | DENNIS ONSONGO
A section of Parliament building Nairobi taken on January 6, 2017. FILE PHOTO | DENNIS ONSONGO |  NATION MEDIA GROUP

Each of the 196 one-term MPs who lost seats in this year’s General Election will walk away with a whopping Sh18.8 million pension payoff, highlighting the heavy burden that taxpayers will shoulder to keep them comfortable out of office.

The former MPs, including senators and members of the National Assembly, will cumulatively receive Sh3.7 billion as a golden parachute for serving a single term in Parliament.

Based on Kenya’s average monthly salary of Sh53,736, it would take 29 years to make the Sh18.8 million that each MP is set to pocket.

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.

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

Each member of the 416-member bicameral Parliament (including the Speakers of the Senate and the National Assembly) is also set to pocket Sh6.7 million, drawing from the Sh2.8 billion that the Treasury has allocated to pay their service gratuity.

Besides their fat salaries, MPs were entitled to a Sh5 million car grant, a Sh20 million mortgage and a Sh7 million car loan.

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.

Pensions payable shall be based on the member’s pensionable emoluments for the last 12 months (whether continuous or discontinuous) during which he or she served.

The pensionable emoluments to MPs include salary, responsibility allowance, constituency allowance, nominated member’s allowance, ex-officio member’s allowance, house allowance, accommodation allowance and sitting allowance.

The MPs earned a salary of Sh532,500 when they came in 2013 and left with a monthly pay of Sh710,000 on August 7, 2017.

Sent home

Voters sent home 196 or 47 per cent of the 416-member Parliament (excluding two speakers).

At the National Assembly, 109 elected MPs, 36 women representatives and four first-term nominees lost their seats.

In the Senate, 36 elected lawmakers and 12 nominees were shown the door. The Parliamentary Service Commission (PSC), the MPs’ employer, deducts 12.75 per cent of each member’s salary as pension and pays the amounts so deducted into the Consolidated Fund.

The Treasury principal secretary is by law required to maintain individual accounts of all contributions deducted in respect of each member and interest notionally credited in respect of his or her contributions.

The SRC in March 2013 gazetted a remuneration package for MPs that included a gratuity benefit calculated at the rate of 31 per cent of annual basic pay to be paid at the end of their term.

The SRC, the pensions department and the PSC are yet to make a decision on whether the MPs will pocket both lifelong pension and gratuity payments following a legal hitch.

Director of Pensions Shem Nyakutu said the gratuity or end-of-term payments will only be paid once the SRC and the PSC have agreed on which of the two retirement packages will apply to legislators exiting after a single or more terms in Parliament.

Arm-twisting Treasury, SRC

Members of the 11th Parliament — emerging from bruising and expensive campaigns — have been pushing for speedy payment of the cash, which has now been stopped pending a decision on what package they deserve.

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

Most Kenyans view their MPs as overpaid, with nearly zero corresponding benefits to the population’s well-being.

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.

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