Former MPs who retired between 1984 and 2001 inched closer to receiving a lump sum of Sh2.7 billion as retirement benefits and a monthly pension of at least Sh100, 000 after a parliamentary committee backed a Bill with the juicy perks.
The National Assembly’s Finance and National Planning Committee chaired by Kipkelion East MP Joseph Limo supported the Bill sponsored by Minority Leader John Mbadi, which seeks to raise pension for lawmakers who served during the 17 years.
If passed, about 290 former MPs will see their pension entitlement raised to a minimum Sh100, 000 per month for life, up from the current average of Sh33, 000.
Another 80 former MPs, who have been excluded from pension, will also receive the payout aimed at lifting them out of poverty and putting them at par with lawmakers who served after 2002 and receive at least Sh120, 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.
The committee sweetened the deal and has recommended that the monthly payout be backdated to January 2010, meaning a lump sum of Sh100, 000 monthly for 119 months to date.
The Parliamentary Budget Office reckons that 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, pushing the total lump sum to Sh2.7 billion.
"A former Member of Parliament, who having served in Parliament between July 1, 1984 and January 1, 2001 and is entitled to pension under this section and whose monthly pension amounts to less than one hundred thousand shillings, shall be entitled, with effect from July 1, 2010, to a monthly pension of one hundred thousand shillings," said the committee. Parliament will vote on the committee’s recommendations on a date to be determined.
The measure will then be forwarded to the President for assent to make it law and commit taxpayers to the pension payments.
"The committee, having considered the Bill clause by clause, proposes that the Bill be passed subject to the proposed amendments," the Limo team recommended in a report signed by 11 out of the 19-member team.
The Parliamentary Budget Office, the fiscal and economic think-tank that advises MPs on budgetary matters, has estimated that if the Bill is enacted into law, the monthly cost of sustaining the former MPs will rise to Sh15.075 million per month or Sh180.9 million annually. The think-tank says the costing and assessment of the financial implications of the Bill were performed based on the assumption that there were currently about 160 former MPs entitled to the proposed pension and about 130 widows/widowers.
"The analysis assumed that each of the former Members of Parliament was entitled to an average amount of Sh33, 000 per month as pension benefits and that each of the widows/widower was entitled to an average amount of Sh16, 500 per month," the PBO said in a brief annexed to Mr Limo’s committee report.
The team warned that should the committee recommend backdating of the pension increments to July1, 2010, it would cost approximately Sh1.76 billion in the first year of implementing the Bill including arrears from the effective date.