Economy

Uhuru wins battle with MPs over Sh100,000 lifetime pay

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Parliament Buildings in Nairobi. FILE PHOTO | NMG

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Summary

  • The House last evening failed to marshal the two-third majority or 233 lawmakers required to veto Mr Kenyatta’s decision.
  • The more than 375 former MPs would have seen their monthly pension rise to above Sh100,000 from the current Sh33,000.
  • The President, in rejecting the proposal, argued that it would add an unwarranted Sh444million annual tax burden on taxpayers.

Former MPs have missed out on a Sh100,000 monthly pension for life plan after Parliament failed to overturn a decision by President Uhuru Kenyatta to block such payouts.

The House last evening failed to marshal the two-third majority or 233 lawmakers required to veto Mr Kenyatta’s decision.

The Finance and National Planning committee of the National Assembly had recommended the reversal of the President’s verdict, claiming he did not consider inflation and the high cost of living while rejecting the Bill awarding lifetime pension to the former legislators.

“The committee noted that the President’s reasons for refusal to assent to the Bill were valid but do not take into consideration inflation and the high cost of living which makes it impossible for the former MPs to survive on the pensions that they are earning currently,” the committee said in its report to the House.

“The committee…recommends that the House agree with its decision to reject the President’s Memorandum and the recommendation to delete Clause 2 of the Bill.”

Mr Kenyatta last month rejected the Parliamentary Pensions (Amendment) Bill, 2019 which was passed by Parliament in August seeking to increase the minimum monthly pension for lawmakers who served between July 1, 1984 and January 1, 2001.

The proposed law sought to update the Parliamentary Pensions Act, which entitles only MPs who had served for two terms or more to a monthly pension of at least Sh125,000 for the rest of their lives. MPs who lose their seats after serving one term are refunded the equivalent of three times their monthly pension deductions plus 15 percent interest for every year served. But the law does not cover lawmakers who retired before 2002.

The more than 375 former MPs would have seen their monthly pension rise to above Sh100,000 from the current Sh33,000.

The President, in rejecting the proposal, argued that it would add an unwarranted Sh444million annual tax burden on taxpayers.

“Added to this, will be the almost certain demand for similar upward review of pension benefits by other retired State and public officers, which is within their rights to demand. The resultant ripple effect is unfathomable and fiscally unsustainable,” he said in a memorandum to Parliament.

Mr Kenyatta also argued that attempts to set lifetime pensions for former MPs would usurp the role and powers of the Salaries and Remuneration Commission (SRC).