Economy

Kaparo, Mutunga in armoured car, pension row with Treasury

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Mr Francis Ole Kaparo (left) and Dr Willy Mutunga. FILE PHOTOS | NMG

Summary

  • Former National Assembly Speaker Francis ole Kaparo has demanded, among his other generous pension benefits, an armoured four-wheel drive 3000 cc engine vehicle bought and fuelled by taxpayers.
  • Former Senate Speaker Ekwee Ethuro and retired Chief Justice Willy Mutunga are also demanding additional millions in retirement benefits, arguing that the Treasury used wrong figures to calculate their exit packages and monthly pension payments.
  • The Deputy President and Designated State Officers Act provides hefty monthly pension payouts equivalent to 80 percent of the last salary of retired CJs and Speakers.
  • Retired chief justices were included in the law in April 2017 after changes to the Act, nearly a year after Dr Mutunga had retired.

Two former Speakers of Parliament and a retired Chief Justice are locked in a standoff with Treasury officials over their demands for lavish retirement perks that include a bullet-proof fuel guzzler, backdated retirement benefits and shift to a higher pension pay scale.

Former National Assembly Speaker Francis ole Kaparo has demanded, among his other generous pension benefits, an armoured four-wheel drive 3000 cc engine vehicle bought and fuelled by taxpayers. Former Senate Speaker Ekwee Ethuro and retired Chief Justice Willy Mutunga are also demanding additional millions in retirement benefits, arguing that the Treasury used wrong figures to calculate their exit packages and monthly pension payments.

After leaving office, Dr Mutunga publicly declared that he was worth Sh80 million. He added that he earned a net salary of Sh50 million in the five years that he served as CJ.

The two, according to correspondence with the Treasury seen by the Business Daily, want the Pensions Department to base their pension payouts on their last gross salaries estimated at about Sh2 million and not the lower figures quoted by the Salaries and Remuneration Commission (SRC), which places the Speakers’ basic salary at Sh693,000 and that of the former Chief Justice at Sh796,732.

If implemented, the higher pay scale will offer Mr Ethuro and Dr Mutunga Sh1.6 million in monthly pension, lump sum payoffs of Sh24 million each and monthly fuel allowances of Sh300,000 each.

However, the Treasury says pension payouts are guided by the SRC pay scales that offer the former CJ an estimated monthly pension of Sh637,386, a lump sum payout of Sh15.9 million and monthly fuel allowance of Sh199,183. Similarly Mr Ethuro is entitled to a monthly pension of Sh554,400, a lump sum send-off of Sh13.8 million and monthly fuel allowance of Sh173,250.

The Deputy President and Designated State Officers Act provides hefty monthly pension payouts equivalent to 80 percent of the last salary of retired CJs and Speakers. This is in addition to a golden handshake equivalent to one-year salary and fuel allowance equivalent to 15 percent of their last pay.

If the Treasury yields to their demands, Mr Ethuro and Dr Mutunga’s monthly take home will surpass President Uhuru Kenyatta’s official salary of Sh1.4 million. It also puts the benefits of the two higher than the salary and benefits of top chief executives of State corporations listed at the Nairobi Securities Exchange such as Kenya Power and KenGen.

“Mr Ethuro and Dr Mutunga want more money based on their last pay cheque, but we are guided by the basic and not gross SRC pay structure,” said a top Treasury official who sought anonymity, citing sensitivity of the matter. “Kaparo demanded an armoured car, arguing that he comes from an area prone to banditry. Again, the State transport policy does not back this demand. But he is pushing.”

Mr Kaparo’s push is emboldened by the law, which does not expressly ban armoured car benefits but only specifies the provision of a four-wheel, 3000 cc engine capacity vehicle replaceable every four years. He is also entitled to a saloon car of 1,800 cc. A 2,986 cc Toyota Prado LJ is currently retailing at Sh7.1 million, but additional millions are needed to turn it into an armoured car.

Car dealers say that it could cost an additional Sh9 million for top armour protection where the Prado is encased with ballistic steel that can withstand a barrage of bullets from an AK-47 rifle and pistol. Under the Retirement Benefits (Deputy President and Designated State Officers) Act, retired officials including Speakers of Parliament, chief justices and their deputies as well deputy presidents get over-the-top retirement benefits. Retired chief justices were included in the law in April 2017 after changes to the Act, nearly a year after Dr Mutunga had retired.

Dr Mutunga wants to be paid for the 10 months between his retirement and when the law was enacted.

“The former CJ wants the pension benefits to be backdated to his retirement date yet he was not part of law,” the Treasury source told Business Daily.Taxpayers cater for office rent, furniture and office equipment, security, medical insurance and diplomatic passports for retired State officials and their spouses as well as maintenance of the vehicles at dealerships.

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Former Senate Speaker Ekwee Ethuro. FILE PHOTO | NMG

The State also pays for their personal assistants, secretaries, accountants, housekeepers, support staff, two gardeners, armed security and cleaners. Those already enjoying these benefits are former Vice-President Moody Awori, three Speakers including Mr Kenneth Marende, retired deputy CJ Kalpana Rawal and two other ex-chief justices who are still alive -- Mr Bernard Chunga (1999-2003) and his successor, Mr Evan Gicheru (2003-2011).

The lavish benefits reflect the growing burden of keeping top public servants comfortable in retirement. For instance, taxpayers spent Sh149.2 million for staff and the office of Mr Awori in the financial year ended June last year. Treasury budget estimates show that taxpayers used Sh79.3 million for Mr Awori and his staff office rent, insurance costs (Sh25 million), staff wages (Sh20.4 million), purchase of cars (Sh11.2 million) and Sh4 million for furniture.

Retirement benefits of former presidents have also come under sharp criticism, especially in the last couple of years when allocations were increased by large margins even as the State insisted it had put in place austerity measures.