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{
"id": 1569812,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569812/?format=api",
"text_counter": 24,
"type": "heading",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "STATUS OF PENSION DISBURSEMENTS TO FORMER MPS"
},
{
"id": 1569813,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569813/?format=api",
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"type": "speech",
"speaker_name": "Sen. Wambua",
"speaker_title": "",
"speaker": null,
"content": "Thank you, Mr. Speaker, Sir. Given that we have 22 minutes for this one, I will spare the Cabinet Secretary a few things that I wanted to say. Let me just go straight to the Question. Mr. Speaker, Sir, I beg to ask the Cabinet Secretary, National Treasury and Economic Planning, the following Question- (a) What is the current status of pension disbursements to former Members of Parliament who served between 1979 and 1992? (b) Has the National Treasury undertaken any review or adjustment of these Pension to ensure they remain fair and sustainable, considering the rising cost of living and inflation over the years? (c) What policy measures has the Government put in place to ensure Pension align with prevailing economic conditions? I thank you, Mr. Speaker, Sir."
},
{
"id": 1569814,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569814/?format=api",
"text_counter": 26,
"type": "speech",
"speaker_name": "Hon. Kingi",
"speaker_title": "The Speaker",
"speaker": null,
"content": " Hon. Cabinet Secretary, you may proceed to respond, bearing in mind that we have received a copy of your response. Therefore, if you may, paraphrase where necessary to save on time. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1569815,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569815/?format=api",
"text_counter": 27,
"type": "speech",
"speaker_name": "Hon. Kingi",
"speaker_title": "The Speaker",
"speaker": null,
"content": "Proceed, Hon. Cabinet Secretary."
},
{
"id": 1569816,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569816/?format=api",
"text_counter": 28,
"type": "speech",
"speaker_name": "Hon. John Mbadi",
"speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
"speaker": null,
"content": " Thank you very much, Mr. Speaker, Sir. In the interest of time, I will try my level best to paraphrase and summarise my response without losing content. I rise to answer Question No.034 raised by Sen. Enoch Wambua, regarding pension disbursements to former MPs who served between 1979 and 1992. The current status is as follows- (a) Former MPs who served between 1979 and 1992 and were eligible for pension benefits, have been receiving payments in line with the Parliamentary Pension Act, Cap 196, as revised in 2012. This revision significantly enhanced their pension entitlements by adjusting the actuarial factor from 1/600th to 1/300th. Effectively, this doubled their pension benefits. As a result, these former MPs received a revised pension lumpsum and an adjusted monthly pension following the implementation of Section 8.2 of the Cap 196, revised in 2012. However, there are also further efforts to review the Pension which have been guided by the recommendations of the Akiwumi Tribunal, which was appointed by the Parliamentary Service Commission (PSC) to review the terms and conditions of service for Members and staff of Parliament. To implement these recommendations, several legislative attempts have been made to amend the Act to accommodate the Akiwumi recommendations which recommended at least a living pension of US$1,000 per month. There was the Parliamentary Pension Amendment of 2019, which lapsed in January 2019. Then there was another Parliamentary Pension (Amendment) Bill 2019, sponsored by Hon. John Mbadi, who was an MP then and this was rejected on 24th September, 2020, following Presidential Reservations. It was passed by Parliament, but rejected by the President. Then, there is the Parliamentary Pension (Amendment) Bill by Hon. John Waluke. This is the Bill of 2023 to implement Kshs100,000 minimum pension. However, it faced opposition first from the National Treasury, which raised concerns about fiscal sustainability and, of course, the Salaries Remuneration Commission (SRC), which also deemed the proposal unconstitutional. The PSC recommended further consultations with stakeholders. Those three reasons made the Bill not to see the light of day. In light of these concerns and Presidential reservations, the Parliamentary Departmental Committee on Finance and National Planning recommended the rejection of the Bill in its entirety, which was done. On the review and adjustments to ensure fair and sustainable Pension as has been asked by the Hon. Member, I wish to report that the National Treasury has undertaken several measures to ensure Pension remain fair, sustainable and responsive to the rising cost of living. These include implementation of the Pension Increase Act, CAP 190, which since 1st July, 2005, Pension have been reviewed every two years with an increment rate of three per cent to help pensioners cope with inflation and rising living costs. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1569817,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569817/?format=api",
"text_counter": 29,
"type": "speech",
"speaker_name": "Hon. John Mbadi",
"speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
"speaker": null,
"content": "Number two is an actuarial valuation of the Public Service Pension Scheme. Regular Actuarial Assessments are conducted every four years to evaluate pension liabilities, funding levels and sustainability. The other one is a Comprehensive Actuarial Review which is currently underway to ensure the long-term financial stability of the pension system. (b) Legal Reforms to Strengthen the Pension Framework; the Government is implementing legal reforms to align public service Pension with our Constitution and recently formulated National Retirement Benefits Policy. These reforms seek to create a more equitable, transparent and robust pension system while ensuring fiscal sustainability. (c) The Policy Measures to Align Pension with Economic Conditions. To protect pensioners from economic shocks and inflation, the Government has implemented the following key policy measures: (1) Increased tax exemptions on pension contributions from Kshs240,000 per annum to Kshs360,000 per annum. What that simply means is that previously, before December 27th, when we passed the Tax Laws (Amendment) Bill, a pension up to Kshs20,000 per month or Kshs200,000 per annum was exempted from tax if you contributed to a pension scheme. Now that has gone up to Kshs30,000 per month. This adjustment not only helps mitigate the effects of inflation but also increases employees' disposable income, reduces payee liabilities and promotes a stronger savings culture. This is one of the provisions in the Tax Laws (Amendment) Bill which is now an Act of Parliament. That was very progressive, we encouraged Kenyans to support and fortunately, it was passed. (2) Tax Exemption on Pension Benefits. The removal of taxes on pension benefits provides retirees with a higher post-retirement income, improving their financial well- being and ensuring a more comfortable retirement. Mr. Speaker, Sir, I wish to report here for those who may not know that, from 27th December, 2024, anyone accessing his pension is now doing so without paying any tax. That is like saving 30 per cent of your entitlement. I think it has been very progressive. Those who have benefited from the same can attest to that. These tax reforms create incentives for individuals to save more for retirement, strengthening financial security in old age and reducing dependency on Government support in later years. (3) We are also strengthening post-retirement medical care. As you are aware, we are now providing tax exemption on post-retirement medical contributions. If you are contributing to a post-retirement medical scheme, you enjoy tax exemption. (4) Establishment of post-retirement medical funds. The National Treasury, through Circular No. 9 of 2024, authorised pension schemes to set up dedicated post- retirement medical funds, ensuring that these have access to affordable and sustainable health care solutions. I am sure you are aware that even Parliament is presently in the process of setting up this Fund to take care of the medical needs of retired MPs. This is to all public servants also. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
},
{
"id": 1569818,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569818/?format=api",
"text_counter": 30,
"type": "speech",
"speaker_name": "Hon. John Mbadi",
"speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
"speaker": null,
"content": "(5) Development of an end-to-end pension administration system. The Government is investing in a modernised pension administration system that leverages advanced technology to improve efficiency and scrutiny. We are also integrating block chain and biometric technology, which will enhance the security of pension management, ensure real-time tracking of pension disbursement and eliminate delays in pension processing. Mr. Speaker, Sir, we are looking in terms of integration of the Integrated Financial Management Information System (IFMIS) for timely remittances. The aim here is to transfer retirees automatically from being employees earning a salary to retirees earning pension benefits without going through rigorous steps of processing your pension. It should be seamless such that when you retire, you should start getting your pension from one month to the next. These reforms collectively strengthen retirement security, improve pension fund sustainability and enhance post-retirement quality of life. Mr. Speaker, Sir, in conclusion, the National Treasury remains committed to ensuring that pension benefits for former MPs and all public service retirees are fair, sustainable and responsive to economic conditions. We will continue working with stakeholders to explore feasibility solutions that uphold fiscal responsibility while ensuring retirees receive their rightful entitlements. I thank you."
},
{
"id": 1569819,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569819/?format=api",
"text_counter": 31,
"type": "speech",
"speaker_name": "Hon. Kingi",
"speaker_title": "The Speaker",
"speaker": null,
"content": " Sen. Wambua, you may ask your two supplementary questions. Hon. Senators, let us avoid speeches. In the interest of time, go straight to the question."
},
{
"id": 1569820,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569820/?format=api",
"text_counter": 32,
"type": "speech",
"speaker_name": "Sen. Wambua",
"speaker_title": "",
"speaker": null,
"content": "Thank you, Mr. Speaker, Sir. Two quick ones; number one, I expected the Cabinet Secretary would give us actual amounts because that was my biggest interest. Since it is public money that is used to pay Pension, I thought he would tell us the amount of money that the lowest pensioner is earning and the amount that the highest pensioner is earning because that would inform his response to the benefits that they have gotten from tax exemption. Lastly, seeing as it were that the Cabinet Secretary was himself pushing this agenda when he was a sitting MP, will he continue pushing this agenda or was he just playing politics? I thank you."
},
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"id": 1569821,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1569821/?format=api",
"text_counter": 33,
"type": "speech",
"speaker_name": "Hon. Kingi",
"speaker_title": "The Speaker",
"speaker": null,
"content": " Hon. Cabinet Secretary, proceed."
}
]
}