Taxpayers Face Higher Bill as MPs Seek Extended Pension Repayment Terms

Kenyan taxpayers could soon shoulder a larger financial burden as Members of Parliament push for changes to their pension scheme that would extend repayment periods and protect benefits for re-elected legislators.

The Parliamentary Pensions Amendment Bill, 2023, now at its third reading in Parliament, seeks to amend the Pensions Act. Sponsored by Kitui Central MP Makali Mulu, the proposal builds on earlier efforts by former Mwatate MP Andrew Mwadime, who is now the Governor of Taita Taveta. The Bill was reviewed during a recent legislative retreat in Naivasha, where MPs discussed welfare measures and exit packages to provide better support after leaving office.

Under the current Pensions Act, MPs face strict rules on pension access. An MP starting a new term must choose between receiving a pension or a gratuity. Those who have served more than one term can opt for a gratuity at the end of their current term. The law limits pension retention for those who lose seats and later return.

The amendment would allow MPs who lose their seats after serving two terms to retain and access their pension benefits upon returning to Parliament, without repaying any previously collected amounts. For example, Kanduyi MP Wafula Wamunyinyi receives a pension based on two terms despite having served four terms overall, highlighting gaps in the existing system.

A major change would extend the pension buy-back period from three months to 45 months. This gives re-elected MPs far more time to repay any collected benefits and rejoin the pension scheme. The Bill also permits early pension access for MPs under 45 who qualify but cannot continue working due to medical reasons.

In addition, the proposal empowers the Parliamentary Service Commission to set up a voluntary post-retirement medical scheme. Both MPs and the government would contribute within set limits to ensure comprehensive healthcare coverage after leaving Parliament.

Supporters argue these measures address high attrition rates among legislators. An actuarial report presented at the retreat showed that 56 percent of current MPs may not return in the next Parliament. The changes aim to provide a good life after service, given the drop in income that follows political exit.

National Assembly Speaker Moses Wetang’ula, who chaired the pensions committee, stressed the importance of post-Parliament security. He highlighted that political attrition is unavoidable and leads to reduced earnings. The Bill would harmonize entitlements by respecting cumulative service periods, even with interruptions, ensuring that time served contributes meaningfully to pensions.

Wetang’ula urged swift passage of the Bill, noting that 560 days remain in the 13th Parliament. He cautioned that delays could turn it into an electoral issue ahead of the 2027 elections. He referenced the June 2024 protests against the Finance Bill, 2024, which President William Ruto later rejected amid public outcry, warning of potential backlash if the pension matter is not handled carefully.

Technical reviews have confirmed the Bill's readiness. Representatives from the National Treasury participated, and Wetang’ula described it as a strong proposal after thorough examination with Mulu, the Pensions Committee, Parliament management, and Treasury officials.

If enacted, the extended terms and protected benefits could raise long-term costs for the public purse, as taxpayers fund the enhanced pension arrangements for legislators.