|
|
Kenya: MPs to Earn Billions in New Lifelong Retirement Package
 |
|
|||||||||
|
||||||||||
Business Daily (Nairobi)
10 March 2008
Posted to the web 10 March 2008
Jim Onyango
The Kenyan taxpayer will foot bills worth billions of shillings to finance savvy retirement packages that MPs awarded themselves through amendments passed by the Eighth Parliament.
It has emerged that the Exchequer will from this year pay millions of shillings in lumpsum and monthly payments that will see some former MPs earn more than Sh400,000 each month for the rest of their lives.
The pensions load is expected to become particularly heavy on the taxpayer as it consumes more money from the Consolidated Fund.
Top among the beneficiaries of the retirement law passed in June 2002 are MPs who have served for five terms including former Keiyo South legislator Nicholas Biwott and former National Assembly Speaker Francis Ole Kaparo.
According to a table of payment schedules prepared by Treasury, the former speaker qualifies for a lumpsum payment of Sh6.4 million besides a monthly payment of Sh405,000 for the rest of his life.
Five term MPs will retire for a lumpsome package of Sh4.6 million and earn a monthly pension of Sh290,000 for the rest of their lives.
Economists warned that the real import of the pensions law is likely to be felt in the next 15 years when more than 300 MPs are expected to have been sent packing by their electors and will qualify to draw pensions.
The strain will be felt in the Consolidated Fund, which will finance the pensions burden given the high rate of turnover in Parliament. During the last General Election alone, only 71 members out of the 210 elected MPs who served in the previous Ninth Parliament made it to the 10th.
This means that the 139 MPs who were voted out must be paid their lumpsum pensions beginning this financial year.
MPs have a contributory scheme into which they pay 12.6 per cent of earnings with the government contributing an additional 25.4 per cent of the MPs salaries.
Each MP's pensionable emoluments is calculated from the total salary, perks for responsibility, constituency and house.
The annual pensionable emolument of an ordinary MP stands at Sh3.8 million while that of ministers and assistant ministers amounts to Sh4.2 million and Sh3.9 million respectively.
Yesterday, it emerged that the Finance ministry's pension department had issued a notice to all the former MPs asking them to file claims for payments of gratuity, pensions and other benefits.
"The Pensions Department will process benefits for MPs who were not re-elected to the 10th Parliament" said the notice.
Former National Assembly Speaker Francis Ole Kaparo
Payment of pensions, gratuities and other benefits to retired MPs are governed by the Parliamentary Pensions Act Cap. 196, which was amended last in 2002.
The law stipulates that an MP who served only one term will be paid pension refund but members who served more than one term will be paid a lumpsum on application for the pension which will thereafter be followed by monthly pension payments.
For example a former MP who served only one term will take home Sh4.4 million in pension refund. But if the MP was a minister, he or she would take away Sh5.5 million. A one term MP who was an assistant minister would earn Sh5.2 million.
Twenty ministers were voted out of Parliament while 25 assistant ministers did not make it to the 10th Parliament.
From this group alone five ministers were first time MPs meaning that Treasury will part with Sh30 million towards their pension refund. Fifteen of the assistant ministers who did not see the inside of the current Parliament were first time MPs and will take home a cumulative figure of Sh75 million.
The ministers and assistant ministers who were felled but had served more than one term in Parliament will take about Sh200,000 more than the ones who served one term.
A minister who served more than two terms is to take a lumpsum pension payment of Sh1.5 million besides a monthly payment of Sh95,000 for the rest of his or her life.
For an ordinary MP who served two terms, a Sh1.4 million cheque would be drawn on his name and he will be lining up at the pensions department at the end of every month for a Sh90,000 payment. The MPs who served three terms and more would earn Sh142,000 every month as pension payments.
In rough estimates, taking into account that 142 MPs - who include seven nominated ones - did not make it to the 10th Parliament, the government will spend about Sh12.7 billion in monthly pension payments on the MPs assuming that all of them were two time legislators.
The consolidated fund services was allocated Sh129.1 billion shillings in the 2007/2008 budget. It is from this kitty that MPs draw their salaries and the same one that will fund the pensions for the retired MPs.
The pension is managed by a Parliamentary Pensions Management Committee chaired by the Speaker and whose members include the Attorney General, PS Treasury, three sitting MPs and the National Assembly Clerk.
The Finance ministry keeps records of the contributions while the pensions department pays the benefits.
So far 16 former MPs have had their pension applications approved and forwarded to the pensions department for payment.
|
Sources said many more applications had been forwarded to the committee for approval before being forwarded to the pensions department.
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2008 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
