Kenya: MPs' Pension Law is Illegal, SRC Says

President Uhuru Kenyatta (file photo).
14 August 2020

The Salaries and Remuneration Commission (SRC) is determined to spoil the party for 100 MPs who served between 1984 and 2001, arguing that the law awarding them Sh100, 000 a month as pension for life was null and void.

In a statement, the SRC said it will petition President Uhuru Kenyatta not to assent to the Parliamentary Pensions (Amendment) (No. 45) Bill which they said will be in contravention of the law because the agency's input was not sought.

"The Bill is in contravention of Article 230 (4) (a) of the Constitution, as pension is an employment benefit, and therefore falls within the mandate of SRC. Any proposal for review of pensions for Members of Parliament should be duly submitted to SRC with justification for consideration," the SRC said in a statement on Thursday.

The SRC is mandated by law to set and regularly review the remuneration and benefits of all state officers. Similarly, the commission has the mandate of making recommendations to the government on the review of pensions payable to current and past holders of public offices.

Additional burden

"If the Bill is enacted into law, as proposed, it shall not only pile additional burden to taxpayers, but shall set a precedence and ripple effect for other categories of public officers to demand for equal treatment and fairness," the SRC said.

Pension expenditure, the SRC said, is expected to hit the Sh100 billion mark in the 2020/21 financial year, up from Sh27.9 billion in 2013/14--a staggering 258 per cent increase.

"This shall therefore make the public pension liability unaffordable and fiscally unsustainable," the SRC said in its statement.

If President Kenyatta signs the bill into law, the National Treasury will be required to set aside at least Sh144 million every year to cater for the monthly pension of the 150 lawmakers.

The amount is backdated to July 1, 2010, when the Parliamentary Service Commission (PSC) adopted recommendations of the Akilano Akiwumi Tribunal, which reviewed the terms and conditions of MPs and employees of Parliament. Only part of that report was implemented.

The take-home the Bill proposes for the former MPs is a significant improvement from Sh2, 000 to Sh5, 000 for legislators who served before the 2010 Constitution.

The law provides that an MP qualifies for pension if he or she has served for at least two terms and is above 45 years old.

The move by the SRC to oppose the pension payments follows a similar one by Treasury, which had opposed the bill, saying if signed, there would be pressure from former MPs earning higher pension to be considered for a similar increase.

"A former MP getting Sh101, 415 would feel aggrieved that he or she served for a long time and is now getting the same amount as those who were in Parliament for one or two terms," Treasury PS Julius Muia said in an October 30, 2019 letter.

Treasury is also worried that if signed into law, the bill will set a wrong precedent for other categories of public servants.

In its letter, Treasury had asked that Parliament conducts an actuarial evaluation and the report referred to the SRC.

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