Treasury plan to shield pension perks of VIPs risks clash with law
The National Treasury Building in Nairobi. Treasury plans to safeguard the retirement benefits of retired senior State officers even if they violated the law.
The Treasury plans to safeguard the retirement benefits of retired Deputy Presidents, retired Vice Presidents, retired Prime Ministers, and other senior officers, including Speakers of Parliament even if they violated the law.
In a controversial proposal in the Finance Bill 2023, the State is proposing to repeal provisions of the Retirement Benefits (Deputy President and State Officers) Act that outlined circumstances where benefits may not be paid to the officers including retired Chief Justice and Deputy Chief Justice.
“The Retirement Benefits (Deputy President and State Officers) Act, 2016 is amended by inserting the following new sections immediately after section 4 4A. (1) A person who— (a) holds an appointive or elective office in the Government; and (b) previously held a position to which pension and other benefits accrue under this Act, shall, upon retirement or ceasing to hold that office entitled under this Act, be paid- (i) a monthly pension equal to eight per cent of the monthly salary of the entitled person’s last monthly salary while in office; and (ii) a lumpsum payment on retirement as calculated as a sum equal to one year’s salary paid for each term served in office” the Finance Bill 2023 reads in part.
Previously, the benefits could be discontinued in instances where a person was guilty of gross misconduct; was in willful violation of the constitution; had been convicted and imprisoned for more than three years; or had continued to engage in activities of a political party after ceasing to hold office.
“The proposed repeal would mean that retired Deputy Presidents, retired Vice Presidents, retired Prime Ministers, and other senior officers, including Speakers of Parliament, retired Chief Justice, and Deputy Chief Justice would not be denied their prescribed retirement benefits under any of the circumstances currently outlined by the Act,” analysts at KPMG said in a note.
“This may be viewed as a departure from the spirit of Chapter 6 of the Constitution on leadership and integrity. Government officials will not have any motivation to comply since if the proposal is passed into law they are protected from consequences of violation of their constitutional duty” the analysts added.
This comes in the wake of growing pressure from members of the ruling Kenya Kwanza coalition to have the retirement benefits of former top officers including retired President Uhuru Kenyatta, ex-Prime Minister Raila Odinga, and ex-Deputy President Kalonzo Musyoka for engaging in active politics.
The Treasury’s shock stance is likely to affect a motion files in the National Assembly last week by Gatundu South MP Gabriel Kagombe seeking to have Mr Kenyatta denied his retirement perks for allegedly engaging in active politics.
The motion also seeks to stop Mr Raila Odinga’s and Mr Musyoka’s pension and other retirement perks.
Mr Kagombe also wants the National Treasury to recover at least Sh844 million that has since been paid to the three former state officers upon leaving office.
The MP accuses the three of engaging in active politics while pocketing their retirement perks, which he says is against the provisions of the Presidential Retirement Benefits Act of 2003 and the Retirement Benefits (Deputy President and Designated Officers) Act of 2015.
The two sets of laws make it mandatory for such state officers to quit active politics to qualify for retirement benefits.
The law is, however, silent on whether such beneficiaries can be surcharged.
“The National Assembly may on a motion supported by the votes of not less than two-thirds of members resolve that a retired president or his surviving spouse, as the case may be, shall not be entitled to the whole or any part of the benefits conferred by this Act,” Section 4 (1) of the Presidential Benefits Retirement Act of 2003.
The Retirement Benefits (Deputy President and Designated Officers) Act of 2015 relates to retired Deputy Presidents, retired Vice Presidents, retired Prime Ministers, and other senior officers, including Speakers of Parliament, retired Chief Justice, and Deputy Chief Justice, and dates back to 1993.
The two laws set out similar grounds for stopping such perks.
The Treasury stance complicates the situation for Mr Kagombe’s motion which requires a heavy majority backing by his fellow MPs to sail through.
With 349 members in the National Assembly, it means it would require 233 MPs or a two-thirds majority to have Mr Kenyatta’s retirement perks stopped.
In the case of Mr Odinga and Mr Musyoka, at least half – 175 MPs – would have to support the motion.
“Where the National Assembly passes a resolution, a retired President or his surviving spouse shall not be entitled to any benefits under this Act or their entitlement to such benefits shall be reduced in accordance with such resolution,” the law reads.
There are 179 MPs allied to Kenya Kwanza, meaning that to have the Motion sail through, they will require the support of 157 MPs allied to Azimio.
