MPs demand evidence of UK colonial pensioners’ existence

Parliament in session. FILE PHOTO | NMG 

By EDWIN MUTAI

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Summary

• The European pensioners are required to file life certificates every April and when they die Crown Agents delete their names from the records.
• PAC directed Mr Nyakutu and Treasury principal secretary Kamau Thugge to ascertain whether the money is not being paid to ghost pensioners.
• Kenya’s National Treasury makes the payments in sterling pounds through Crown Agents Bank, a leading development bank that is regulated by the UK Financial Services Authority.
• The remittances are in line with the Public Officers Pensions (Kenya) Agreement of March 1977 signed between the UK and Kenya.

The National Treasury has two weeks to ascertain the actual existence of British colonial pensioners that Kenya continues to pay millions of shillings 55 years after Independence.

The National Assembly’s Public Accounts Committee (PAC) issued the directive after it summoned Director of Pensions Shem Nyakutu for a meeting to explain why Nairobi continues to pay people who left Kenya in 1963.

“These were colonial officers, who were retrenched through Africanisation. The Government of Kenya undertook to pay their pension through UK’s Crown Agents. Every year we pay money to the agents upfront for onward distribution to the beneficiaries,” Mr Nyakutu said, adding a statement of the payments is then sent to the Kenyan government.

The European pensioners are required to file life certificates every April and when they die Crown Agents delete their names from the records.PAC directed Mr Nyakutu and Treasury principal secretary Kamau Thugge to ascertain whether the money is not being paid to ghost pensioners.

Kenya’s National Treasury makes the payments in sterling pounds through Crown Agents Bank, a leading development bank that is regulated by the UK Financial Services Authority.

The remittances are in line with the Public Officers Pensions (Kenya) Agreement of March 1977 signed between the UK and Kenya.

Former president Mwai Kibaki, who was Finance minister at the time, signed the agreement on behalf of Kenya.

PAC chairman Opiyo Wandayi gave the Treasury 14 days to establish the authenticity of the pensioners and report back to Parliament.

Mr Nyakutu told the committee that the Pensions Department relies on records from Crown Agents instead of its own to make payments, a position the PAC said exposed Kenya to high level fraud.

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Auditor-General Edward Ouko has questioned the schedules provided by the Crown Agents bank accounts and for which there is nothing to compare with from the Pensions Department.

“These are schedules we have received from the bank and not the client (Pensions Department),” Mr Ouko said through a manager during scrutiny of Treasury accounts for 2015/16. Nambale MP Sakwa Bunyasi said whereas the agreement put a major obligation on Kenya, there is need to ascertain actual pensions payable given the known life expectancy.

“We did this after Independence but more than 47 years have passed. The mount involved is not big but it takes away public funds and besides, the amount should be declining,” Mr Bunyasi said.

Treasury officials could not explain why Kenya has not carried out a head count of the British pensioners but has instead chosen to purely rely on Crown Agents records.

“Ordinarily, you should be the ones generating the payroll and giving it to Crown Agents to pay the pensioners. But what you are doing is the opposite,” Geoffrey Omuse, the MP Teso South, said.

Dr Thugge promised to provide schedules of payments made to the British pensioners.

“We have records and files that we will share with auditors,” Mr Nyakutu said.

Dr Thugge also promised to table a status report on the progress made in the winding up of several dormant funds as directed by PAC in the previous parliaments.

The Tenth Parliament found that the Asiatic Widows and Orphans Pension Fund, Rural Enterprises Fund, Local Loans Support Fund, Sinking Fund, Rural Enterprise Fund and the Tourist Development Fund are no longer active.

It directed the Treasury to seek Parliament’s approval to dissolve the accounts as well as to restructure some active accounts, including the Asian Officers Family Pension Fund of 1946 and the European Widows and Orphans Pension Fund.

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