Kenyans Could Face Higher Taxes to Fund MPs’ Pensions

Kenyans may have to contribute more to fund Members of Parliament (MPs) pensions if the Parliamentary Pensions Amendment Bill, 2023, becomes law.

The bill, introduced by Kitui Central MP Makali Mulu, seeks to extend repayment periods for pensions already collected by one-term MPs. It also aims to protect two-term MPs who lose their seats from losing their monthly pension if they return to Parliament.

During a recent legislative retreat in Naivasha, MPs took time off their busy schedules to review their welfare packages and exit benefits. Among the key proposals under consideration is this new pension plan, which could take effect once Parliament resumes.

The amendment, currently at its third reading, proposes changes to the Pensions Act. It ensures that MPs who have served two terms but lost in their third term can still receive their pensions if they make a political comeback—without having to repay benefits already received.

MP Mulu highlighted the issue using Kanduyi MP Wafula Wamunyinyi as an example: “The pension he receives now covers two terms, yet he has actually served four terms.”

Under the proposed changes, MPs starting a new term would have the option to choose between receiving a pension or a gratuity, in accordance with the law.

One of the bold aspects of the bill is extending the pension buy-back period from three months to 45 months. This gives re-elected MPs more flexibility to rejoin the pension scheme without financial pressure.

Additionally, MPs who retire due to medical reasons would be eligible for a pension or gratuity even if they have not reached the age of 45. Mulu explained: “If you are under 45 and qualify for a pension but cannot continue working due to medical reasons, this bill allows you to access your pension earlier.”

If passed, the amendments to the Pensions Act could mean higher costs for taxpayers, as funding MPs’ pensions may require deeper public contributions.