President Uhuru Kenyatta has rejected the Bill seeking to award former MPs Sh100,000 in monthly pension for life, saving taxpayers billions of shillings and safeguarding the independence of the Salaries and Remuneration Commission (SRC).
The National Assembly had in August approved the Parliamentary Pensions (Amendment) Bill, 2019 which sought to increase the minimum monthly pension for lawmakers who served between July 1, 1984 and January 1, 2001.
The more than 375 former MPs would have seen their monthly pension rise to above Sh100,000 from the current Sh33,000.
Mr Kenyatta, however, has declined to sign the Bill into law, arguing that it would add an unwarranted Sh444million annual tax burden on taxpayers.
“Added to this, will be the almost certain demand for similar upward review of pension benefits by other retired State and public officers, which is within their rights to demand. The resultant ripple effect is unfathomable and fiscally unsustainable,” he said in a memorandum to Parliament Thursday.
It would require a two-thirds majority to overturn the President’s position.
The proposed law sought to update the Parliamentary Pensions Act, which stipulates that only MPs who had served for two terms or more are entitled to a monthly pension of at least Sh125,000 for the rest of their lives.
MPs who lose after serving one term are refunded the equivalent of three times their monthly pension deductions plus 15 per cent interest for every year served. But the law did not cover lawmakers who retired before 2002.
“In his memorandum dated September 7, 2020, the President expressed reservations on Clause 2 of the Bill which sought to amend section 8 of the Parliamentary Pensions Act (Cap 196) to provide for an entitlement for former Members of Parliament who served between July 1, 1984 to January 1, 2001 to a monthly pension of Sh100,000,” National Assembly Speaker Justin Muturi said.
The President also found the proposed amendments vague on the contribution of the benefiting MPs.
“The President notes that member’s pension under the Act are calculated according to the contributions paid into the pensions scheme during their parliamentary term,” the Speaker said in a communication to MPs. “The proposed amendment fails to provide for such calculation, and makes no reference to the member’s contributions.”
And in what marks a big win for independent commissions, President Kenyatta said attempts to set lifetime pensions for former MPs would usurp the role and powers of the SRC.
Article 230(4) of the Constitution mandates the SRC to set and regularly review the remuneration and benefits of all State officers and advise the national and county governments on the remuneration and benefits of all other public officers.
The SRC had petitioned President Kenyatta to reject the Bill terming it illegal because MPs didn’t seek its input on the planned changes.
“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 August 13.
The Treasury had also opposed the Parliamentary Pensions (Amendment) Bill, 2019, saying it would trigger pressure from former MPs earning higher pension to be considered for a similar increase
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