New Proposed Law Will See MPs Get Ksh11.6M Send Off Package
Kevin Namunwa  |  Aug 6, 2020

Kenyan Members of Parliament are set to improve their retirement lives at the expense of the taxpayer. MPs will soon get a Ksh11.6 million send-off package at the end of each five-year term if proposals by Parliament’s pensions management committee are approved.

The committee tabled proposals that will see the lawmakers choose between making monthly pension contributions and the Ksh 11.6 million gratuity payable at the end of each term.

MPs who choose the gratuity scheme will be entitled to an equivalent of 31% of their basic pay for the 60-month term without contributing a cent.

Those who choose to contribute for pension, on the other hand, will not get gratuity but will get a lifelong monthly payout of at least Ksh125,000. However, they will only get the lifelong salary scheme if they exit after two or more terms.

For MPs who opt to pay pension but only stay in office for aa single term, they will be refunded the equivalent of three times their monthly pension deductions plus 15% interest for every year served.

The proposed law further allows pension-contribution MPs who have served more than one term to switch to gratuity and the end of the parliamentary term they are serving at the time.

The new gratuity pay will be calculated at the rate of 31% of an MP’s basic pay, which the Salaries and Remuneration Commission (SRC) fixed at Sh621,250 through a gazette notice in 2017.

This means each MP opting for gratuity will receive Sh11.55 million, being 31% of Sh37, 275, 000 earned over a five-year term.

The new law comes after MPs reviewed their retirement benefits law to allow about 375 former legislators who served between 1984 and 2001 to earn Sh100,000 in monthly pensions.

The House yesterday morning passed the Parliamentary Pensions (Amendment) Bill, 2019 to raise pension for MPs who served 17 years ago from the current low of Sh33,000 to above Sh100,000, a move that could pile additional burden to taxpayers if President Kenyatta appends his signature.

The proposed law is yet another reflection of the growing taxpayer burden of keeping top public servants comfortable in retirement.