Summary
- The Parliamentary Service Commission (PSC) has asked the Treasury to allocate Sh2.1 billion in the supplementary budget for approval when MPs resume from recess on February 12, according to correspondence seen by the Business Daily.
- Should PSC get its way, the money will be paid to former MPs who lost their seats in last year's General Election after serving only one term.
- The latest push for yet another hefty payout comes despite the Pension Department having paid the former lawmakers about Sh5.9 million each as an exit package last year.
Parliament is secretly pushing the Treasury to pay over 300
former MPs a send-off package of at least Sh7 million each in defiance
of the law.
The Parliamentary Service Commission (PSC)
has asked the Treasury to allocate Sh2.1 billion in the supplementary
budget for approval when MPs resume from recess on February 12,
according to correspondence seen by the Business Daily.
Should
PSC get its way, the money will be paid to former MPs who lost their
seats in last year's General Election after serving only one term.
The latest push for yet another hefty payout comes despite the
Pension Department having paid the former lawmakers about Sh5.9 million
each as an exit package last year. The one-off payment was yet another
reflection of the growing burden of keeping top public servants
comfortable in retirement.
Parliament is now arguing
that the Salaries and Remuneration Commission (SRC) was wrong in
stopping the Sh2.1 billion send-off pay that PSC is now demanding. It
argues that MPs must get an exit pay equivalent to 31 per cent of the
total pay they earned during their term in office like other State
officers such as governors.
MPs have in recent years
gained notoriety for arm-twisting the Treasury and the salaries
commission to line their pockets with fat pay cheques and perks, making
them among the best paid in the region.
The PSC, the
MPs’ employer, had earlier this month sent a letter to the Pensions
Department asking Treasury to calculate the additional exit package for
inclusion in the supplementary budget.
However, the law
does not support the proposed pay. “It has been determined that the
commission should request the National Treasury for the full amount of
gratuity that would accrue to all one-term members of the 11th
Parliament in the forthcoming 2nd supplementary budget,” says the letter
signed by PSC secretary Jeremiah Nyegenye.
“For budgeting purposes, this is to request you to calculate the
total amount of gratuity that would be due to all one-term members.
”The salaries commission has advised against the proposed send-off
package. SRC maintains that the MPs cannot be offered both a minimum
gratuity of Sh7 million and a refund of their pension contributions,
which includes a share of government contribution and an annual interest
of 15 per cent for the five years they were in office.
Parliament, on the other hand, says the former MPs are willing
to refund the government contribution once they get the Sh2.1 billion.
“Once the funds are received, the commission (PSC) would then pay to the
Pensions Department the government contribution that had been paid to
the said members,” Mr Nyegenye says in the letter to the Treasury.
If
Parliament gets its way, the 304 MPs and senators who lost in the
August 8 elections will cumulatively receive Sh2.12 billion as a golden
parachute for serving a single term in Parliament.
The
former MPs have been pushing for the speedy payment of the additional
cash, hence the pressure that their employer is piling on the Treasury.
The
payment looks set to stoke anger among Kenyans who view MPs as
overpaid. Besides their fat salaries of more than Sh1 million, MPs are
entitled to a Sh5 million car grant, a Sh20 million mortgage, a Sh7
million car loan, monthly airtime of Sh15,000 and Sh10 million medical
insurance.
A top Treasury official has termed the
proposed send-off package illegal, arguing that the Parliamentary
Pensions Act does not support the golden parachute that the MPs are
demanding.
“The law only recognises two payments for
exiting MPs; a refund for one-term MPs and life-long pension for those
who have served for at least two-terms,” said the official who sought
anonymity for fear of upsetting MPs .
Ironically, some
members of the 10th Parliament, whose term ended in 2013, walked away
with both the pension and the send-off package.
This
set a bad precedent that Parliament is now using to pursue the secret
Sh2.1 billion payoff. The Parliamentary Pensions Act stipulates that
only those who serve for two terms or more are entitled to a monthly
pension of at least Sh125,000 for the rest of their lives.
That
means an MP who served for four terms between 1992 and 2013 for
instance earns a monthly pension of about Sh194,000.MPs who lose after
serving one term are refunded the monthly pension that was deducted from
their pay.
They also get the government’s top-up and an additional 15 per cent interest for every year that they served.
As
a rule, lawmakers pay 12.75 percent of their salary as their pension
contribution. This is the amount that is matched by the State.
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