advertisement

Economy

One-term MPs’ pay drops to Sh5m in pension option

MPs who served for more than a term will get at least Sh7 million and a monthly pension of Sh118,000. file PHOTO | NMG
MPs who served for more than a term will get at least Sh7 million and a monthly pension of Sh118,000. file PHOTO | NMG 

About 196 one-term MPs who lost their seats in the August 8 elections have taken a cut on their pension after Parliament opted to refund them their contribution of Sh5.9 million.

The Salaries and Remuneration Commission (SRC) had asked MPs to choose either a Sh6.7 million end-of-term pay or a refund of their contributions.

The Treasury had set aside Sh2.8 billion in the budget as gratuity cash, guaranteeing each MP Sh6.7 million at the end of term.

The SRC ruled that the lawmakers must decide whether they want gratuity or pension, prompting the Parliamentary Service Commission (PSC) to opt for the smaller refund of their retirement contribution.

“Each of the applicants who served one term only will receive Sh5.9 million inclusive of their personal and government contribution of equivalent as well as 15 per cent interest. The amount paid will, however, be gross of tax,” the Clerk of the National Assembly Michael Sialai has said. This means the MPs will take home less than Sh5 million after tax. 

Some members of the 10th Parliament that came to a close in 2013 walked away with both pension and gratuity, pushing their earnings above Sh10 million.

Lawmakers are deducted 12.75 per cent of salary monthly for their pension, which is matched by the State.

The law provides that those who have served for less than two terms get a refund of their contribution and annual interest of 15 per cent.

But MPs opted for contributions less than the set 12.5 per cent of Sh40,000 monthly, hurting the size of their pension.

A total of 275 MPs — first or second timers — lost their seats in the August poll out of which 225 were in the National Assembly and 50 in the Senate.

Those who served for two terms or more will each receive a lump sum payment of at least Sh7 million and a monthly lifelong pension of Sh118,000.

Some of the long-serving MPs who lost include Ababu Namwamba, Paul Otuoma, David Musila, Billow Kerrow, Elija Langat and Gideon Mungaro.

The former MPs have been pushing for speedy payment of the cash.

advertisement