Economy

Parliament votes on former MPs Sh100,000 a month lifetime pay

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Taxpayers will fork out Sh450 million annually as pension for former MPs who retired between 1984 and 2001, if a Bill sponsored by Minority Leader John Mbadi is passed into law. FILE PHOTO | NMG

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Summary

  • About 290 former MPs will see their pension entitlement raised to a minimum Sh100,000 per month for life, up from the current Sh33,000.
  • Another 80 former MPs, who have been excluded from pension, will also receive the payout aimed at putting them at par with those who served after 2002 and receive at least Sh125,000 monthly.
  • Of the 290 former lawmakers, 130 of them are dead and their dependents will be entitled to about half of the monthly pay.

MPs who retired between 1984 and 2001 are set to receive a monthly pension of Sh100,000 for life under revised changes to the National Assembly’s retirement benefits law.

The House will tomorrow vote on the Parliamentary Pensions (Amendment) Bill, 2019, which seeks to impose a minimum pension for lawmakers who served during the 17 years.

The MPs are also expected to approve amendments the Parliamentary Pensions Act, 2002 to remove a requirement that only those who served for two terms during the 17 years be entitled to lifelong pension.

This means that more than 375 former MPs will see their monthly pension rise to above Sh100,000 from the current low of Sh33,000, adding additional burden to taxpayers in the quest to keep former lawmakers happy in retirement.

The payout will be backdated to July 2010, offering the former MPs millions of shillings in arrears.

“That the Bill be amended by deleting clause 2 and substituting therefor the following new clause-in sub-section (1) (b) by deleting the word ‘two’ and substituting therefore the word ‘one’,” the committee said in new amendments to the Bill.

This means that all those who served a single term during the period will be paid pension backdated to July 1, 2010 in line with recommendations of the Akilano Akiwumi Task Force.

The Parliamentary Pensions Act, which came into force in 2002, stipulates that only MPs who serve for two terms or more are entitled to a monthly pension of at least Sh125, 000 for the rest of their lives.

For MPs who lose after serving one term, they are refunded the equivalent of three times their monthly pension deductions plus 15 per cent interest for every year served.But the law did not cover lawmakers who retired before 2002.

About 290 former MPs will see their pension entitlement raised to a minimum Sh100,000 per month for life, up from the current Sh33,000.

Another 80 former MPs, who have been excluded from pension, will also receive the payout aimed at putting them at par with those who served after 2002 and receive at least Sh125,000 monthly.

Of the 290 former lawmakers, 130 of them are dead and their dependents will be entitled to about half of the monthly pay.

Last year, the Parliamentary Budget Office said the 290 former MPs will receive a lump sum of Sh1.76 billion or an average of Sh6 million each.

The remaining 80 will get a single payment of Sh11.9 million to date and the Sh100,000 monthly for life.

Once MPs approve the changes, the Bill will be forwarded to the President for assent into law, committing taxpayers to the pension payments.

The Parliamentary Budget Office has estimated that if the Bill is enacted into law, the cost of sustaining the former MPs will rise to Sh15.075 million per month or Sh180.9 million annually.