The National Treasury has rejected a Bill seeking to triple the pension for lawmakers who served between 1984 and 2001 to Sh100,000, saying it will significantly increase the burden on the exchequer.
Treasury Principal Secretary Chris Kiptoo told the National Assembly’s Finance and National Planning committee that the enactment of the Bill would work against efforts by the government to manage the public wage bill sustainably.
Dr Kiptoo, represented by Pensions Secretary Alfred Kagika, objected to the reintroduction of the Parliamentary Pensions (Amendment) Bill, 2023 which seeks to increase the pension of former MPs who served between July 1, 1985 to January 1, 2001.
The Bill, sponsored by Sirisia MP John Waluke, proposes to increase pension paid to former MPs from the current Sh33,000 per month to Sh100,000.
A bank slip tabled by Mr Waluke shows that the lowest pension paid to a former MP who served two terms until 2002 is Sh7,084 per month.
“The amendment to the Parliamentary Pensions Act will embolden other categories of public servants who feel that their pension is inadequate to agitate for similar treatment which would exponentially increase the pensions burden on the exchequer,” Mr Kagika said.
He went on: “This would work against efforts by the government to manage the public wage bill in a sustainable manner.”
The Treasury, however, proposed an alternative approach, proposing a yearly adjustment of five percent to Members of Parliament’s pensions to safeguard their benefits from the effects of inflation.
This is the third time the Treasury has rejected the Bill that has been revived after two previous attempts were vetoed by former President Uhuru Kenyatta.
Mr Waluke has republished the Bill after the initial version, then sponsored by former Mwatate MP Andrew Mwadime and nominated MP John Mbadi, was shot down by Mr Kenyatta who said it would add a Sh444 million annual burden on taxpayers.
The Bill says that the proposed changes to the Parliamentary Pensions Act, 2002 will lift the fortunes of more than 375 former MPs.
“Despite serving the nation, some former Members of Parliament are languishing in poverty and there is [a] need to take care of their welfare,” Mr Waluke said.
The fresh push comes at a time the government is seeking to reduce the wage bill and free up cash to fund development projects and pay maturing loans.
The Treasury recently announced cuts to recurrent spending by ministries, departments, and agencies (MDAs) that are estimated to save the taxpayer Sh130.2 billion.
President William Ruto on October 5 chaired a Cabinet meeting that approved streamlining spending as part of measures to anchor planned fiscal consolidation.
A brief presented to the House committee estimates that the cost of sustaining the former MPs will rise to Sh15.075 million per month or Sh180.9 million annually if the Bill is passed into law.
The proposed law further seeks to backdate the new pension to July 1, 2010, in line with recommendations by a task force appointed to evaluate the lives of former MPs 10 years ago.
Chaired by Justice (Rtd) Akilano Akiwumi, the team recommended that 500 former MPs who served between 1984 and 2001 be paid the equivalent of $1,000 as a lifetime pension and the payment be backdated to July 1, 2010.
The current law that governs pension for MPs stipulates that only lawmakers who serve for two terms or more are entitled to a monthly pension of at least Sh125,000 for the rest of their lives.
