MPs pass Bill to wrest pension from Treasury


MPs during a session at Parliament chambers. PHOTO | FILE

MPs will take control of their pension payments from the Treasury following changes to the law that will see lawmakers influence their retirement benefits.

The MPs approved the Parliamentary Pensions (Amendment) Bill, transferring management of their retirement benefits to the Parliamentary Service Commission (PSC) and not Treasury.

This will give the MPs employer the leeway of determining pension’s computation and payments.

Parliament has in the past been locked in fights with the Treasury over the payment of MPs pension, especially pay of a send-off package to former lawmakers who lost their seats in General Elections.

In 2019, Treasury stopped a bid by Parliament to pay more than 300 former MPs a send-off package of at least Sh7 million each in defiance of the law.

The Treasury’s Pensions Department currently processes all refunds of contributions, interest on contributions, pensions, gratuities and allowances from the Consolidated Fund.

“The payment of pension, gratuity, refund of contributions and other allowances payable shall be provided for in the estimates of the commission (PSC) pursuant to Article 127 of the Constitution,” the changes, moved by Finance committee chair Gladys Wanga, states.

The Bill allows the MPs to choose between making monthly pension contributions and the gratuity payable at the end of each term. Under the gratuity scheme, MPs will be entitled to an equivalent of 31 percent of their basic pay for the 60-month term without contributing a cent.

Lawmakers who opt to contribute for pension will, however, not get the gratuity but remain in line for a lifelong monthly payout of at least Sh125,000 should they exit after serving for at least two terms. The one-off payment is yet another reflection of the growing taxpayer burden of keeping top public servants comfortable in retirement.

“Subject to provisions of this Act, a person shall be entitled to gratuity under this section where the person ceases to be a Member of Parliament and has served an aggregate period of five years or less,” the Bill, which MPs debated last evening, states.