An amendment to the parliamentary pension Act, which would have seen MPs who retired between 1984 and 2001 receive a monthly pension of Sh100,000 for life under revised changes to the National Assembly’s retirement benefits law,was rejected by the president yesterday.
Uhuru declined to assent to the act owing to its overall effect to the already strained economy.
According to Speaker Justin Muturi said the President objected because ‘the resultant ripple effect is unaffordable and fiscally unsustainable.
The amendment was sponsored by the minority leader in parliament John mbadi.’
“The proposed pension payment will result in an annual cost implication of about Sh444 million,” Muturi said,
Further demand for upward review of pension benefits by other retired State and Public Officers, which would be within their right to was another reason to why the president declined to ascend.
However, the head of state recommended the deletion of the clause that carries the primary content of the Bill, with a view that it does overlook the mandate of the Salaries and Remuneration Commission.
The SRC is constitutionally mandated with setting and reviewing of remuneration and benefits for all State Officers, who include MPs.
“Amongst the reasons for his reservations, H.E. the President notes: Members’ pension under the Act are calculated according to the contributions paid into the Scheme during the parliamentary term. The proposed amendment fails to provide for such calculation, and makes no reference to the Members’ contributions,” Speaker Muturi informed the House.
Treasury Cabinet Secretary Ukur Yattani had also expressed concerns that the Bill will set a wrong precedent for other categories of public servants.
Yattani wants an actuarial evaluation conducted to evaluate its opinion and that the report be referred to the SRC.
Muturi referred the President’s Memorandum to the House Committee on Finance and directed it to file its report within 21 days for MPs to render their decision.
At least two-thirds majority or 233 of the 349 MPs in the National Assembly are required in order to override the President’s veto.
The passage of the Parliamentary Pension (Amendment) Bill, 2019 would mean the government will be required to pay at least Sh1.15 billion in lump sum enhanced pension to the former MPs.
The amount is backdated to July 1, 2010, when the Parliamentary Service Commission adopted recommendations of the Akiwumi Tribunal, which reviewed the terms and conditions of MPs and employees of Parliament.
One of its recommendations was that the 500 former MPs at the time be paid the equivalent of Sh100,000 as living pension from July 1, 2010.
National Treasury opposed the bill on account that if signed into law, there would be pressure from former MPs earning higher pension to be considered for a similar increase.
The law currently provides that an MP qualifies for pension if he or she has served for at least two terms and is above 45 years old.
