Economy

MPs wrest control of their pensions from Treasury

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Parliament buildings in Nairobi. FILE PHOTO | NMG

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Summary

  • Parliament has grabbed control of their pension payments from the Treasury.
  • The National Assembly last evening unanimously approved changes to the Parliamentary Pensions (Amendment) Bill.

Parliament has grabbed control of their pension payments from the Treasury, opening the doors for lawmakers to influence their retirement benefits on expiry of their term on August 9, 2022.

The National Assembly last evening unanimously approved changes to the Parliamentary Pensions (Amendment) Bill, transferring management of their retirement benefits to the Parliamentary Service Commission (PSC) and not Treasury.

“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.

Under the current arrangement, the Treasury’s pensions department would process all pensions, gratuities and related allowances from the Consolidated Fund.

The Bill, which sailed through Parliament and now awaits President Uhuru Kenyatta signature to become law, gives the MPs’ employer a free hand in determining pension’s computation and payments.

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 lawmakers further altered the Parliamentary Pensions Act to empower the PSC to make regulations for prescribing anything required by the proposed Bill.

“Without prejudice to the generality of sub-section (1), regulations under this Act may provide for the administration of pension, gratuity and other benefits to Members of Parliament,” the Bill states.

Lawmakers will also enjoy medical cover beyond the end of their term after they endorsed changes in the Bill.

The MPs unanimously passed an amendment that seeks to establish voluntary post-retirement medical scheme for MPs.

Last evening, Speaker Justin Muturi shot down an amendment that would have opened the floodgates for former lawmakers who served in previous parliaments to get pension.