RETIRING IN STYLE: From left, Retired former President Daniel Moi, Retired Kacc boss Aaron Ringera and Retired Chief Justice Evan Gicheru. Photos/FILE
By JULIUS SIGEI jsigei@ke.nationmedia.com
Posted Friday, August 12 2011 at 22:30
Posted Friday, August 12 2011 at 22:30
Taxpayers should brace themselves to pay billions of shillings to hundreds of senior public officials who have left or are leaving office in the next year.
President Kibaki, who is constitutionally barred from seeking another term, Attorney General Amos Wako, who is leaving office before the end of this month, judges who opt to retire rather than face vetting, MPs and Speaker Kenneth Marende’s exits will come at a huge cost to the taxpayer because many of them are guaranteed a lifetime of comfort and even luxury.
Former Chief Justice Evan Gicheru and former anti-corruption czar Aaron Ringera have left with hefty packages.
Saturday Nation reveals details of how these top officials’ retirement will further burden the taxpayer, already reeling from the high cost of living amid one of the most devastating famines in the country’s history.
Four messengers
President Kibaki can expect a life of luxury in retirement with 38 servants paid for by the public at his beck and call.
These include two personal assistants, four drivers, four messengers, four secretaries, two cooks, two housekeepers, two gardeners, two laundry persons, and four house cleaners.
Six security officers will be provided for his personal safety and six others to guard his homes.
In his bank account will be deposited a Sh17 million goodbye token.
This is calculated as the sum equal to his annual salary for the two terms he served as President as stipulated in the Presidential Retirements Benefits Act of 2003.
He will receive at least Sh950,000 pension each month — calculated as 80 per cent of the salary of the next president.
He will be entitled to a housing allowance of Sh300,000 a month; Sh300,000 a month for electricity, water and telephone and a further Sh200,000 for entertainment.
Overseas treatment
He will also be entitled to two four-wheel drive vehicles with an engine capacity of 3,400cc and two others of his choice with an engine capacity of at least 3,000cc. To fuel the cars, he will get a Sh200,000 monthly allowance.
He and his wife are also entitled to full medical and hospital cover for local and overseas treatment from a reputable insurance company.
The taxpayer will also pay for a fully furnished “suitable” office for the retired president.
Chapter 11 of the 2003 Presidential Retirements Benefit Act says “a retired President shall, during his lifetime, be entitled to a lump sum payment on retirement, calculated as a sum equal to one year’s salary for each term served as President.”
Section 3, however, includes the caveat that the National Assembly may withhold the benefits if the retired president engages in politics or other misconduct.
His predecessor, Daniel arap Moi is enjoying benefits which easily put him among the best paid public servants in Kenya.
Treasury documents show that Mr Moi, who has largely kept to non-official duties and political campaigns, pocketed Sh58.4 million in allowances last year, reflecting a major increase in his retirement package from an average of Sh12 million since 2006. Treasury officials were tight-lipped on the sudden rise.
Mr Moi’s package was first included in the 2006/07 estimates. In terms of personal allowances, he took home more money than President Kibaki, who earns Sh16.1 million in personal allowances annually.
President Kibaki constitutionally vacates office in 2012/13 and his successor will inherit the same payments, according to the recurrent estimates.
Details of Mr Moi and his successors’ pay are contained in the recurrent expenditure estimates under the Consolidated Funds Services, the account from which constitutional office holders and debt services are paid.
Observers say the lavish perks were first mooted towards the end of the Moi administration to entice him to leave office quietly after what critics say were years of economic mismanagement, graft and repression.
Yet retiring presidents are really not some of the neediest citizens.
Reported to own seven impressive homes across the country and associated with 30 major companies, Mr Moi’s personal wealth has often been compared to that of Zaire’s late dictator, Mobutu Sese Seko.
While the Saturday Nation could not establish retired Chief Justice Gicheru’s retirement package, sources at the Treasury say Mr Gicheru will continue drawing his salary for the years left for him to clock his retirement age of 74.
Given that he is only 66, he will have earned in excess of Sh120 million by the time he retires in eight years’ time.
He has also retained two new cars — a Mercedes and a 4WD as well as a home in Karen.
Mr Gicheru was earning Sh916,500 per month and Sh400,000 in allowances and other benefits totalling Sh1.3 million per month.
Attorney General Wako’s retirement package is being worked out by the Solicitor General and will soon be handed over to Deputy Prime Minister and Finance minister Uhuru Kenyatta.
Given the longevity of his service and the fact that he has not taken leave for a long time he is expected to go home with even more than the former.
Judges are also expected to go home with hefty retirement packages.
It is believed many would be opting to leave rather than face a potentially crushing interview and they would be leaving with huge perks, given their current earnings.
Justice Minister Mutula Kilonzo has in the past been quoted saying judges and magistrates who opt to retire would be assured of their perks.
Figures from the Judiciary showed that the basic salary of the highest paid judge is Sh481,000.
The basic entry salary for a High Court judge is Sh232,000 while that of a Court of Appeal judge is Sh292,000.
The Judiciary has 44 High Court judges and 11 in the Court of Appeal.
Prime Minister Raila Odinga and Vice-President Kalonzo Musyoka can also expect to be paid hefty retirement perks if Parliament passes new laws on MPs’ salaries.
If they decide to quit politics, Mr Odinga will be entitled to Sh1 million a month while Mr Musyoka will take home Sh800,000.
The handsome packages are contained in reports by a tribunal set up to review MPs’ pay and the Parliamentary Service Commission headed by retired judge Akilano Akiwumi.
Legislators are, however, yet to debate the draft Bills.
The report proposes the enactment of The Retirement Benefits (Prime Minister, Vice-President and Speaker of the National Assembly) Bill 2010 to provide for a raft of benefits these officials will be entitled to.
The Bill, which was to be tabled in the House by Finance Minister Uhuru Kenyattta a year ago, proposes that the retired PM and VP each receive a monthly pension equal to 80 per cent of the last monthly salary earned while in office.
The report also recommended that the PM takes home a basic monthly salary of Sh1.3 million and the VP Sh1 million.
In addition, the Bill grants a retired PM and VP a Sh200,000 monthly housing allowance and gratuity, paid at the end of every two years and calculated at the rate of 20 per cent of their last monthly salaries while in office.
But Parliament, through a two thirds majority, may vote to deny them the benefits if they cease to hold office for violating the Constitution, gross misconduct or, since retirement, been convicted and sentenced to three or more years’ in jail or actively engaged in politics.
The bill has, however, not come before the House, with MPs in the know saying they decided to leave the Salaries and Remuneration Commission to do the job.
Both the PM and VP will receive a 3,000cc car, a new four-wheel drive car (not exceeding 3,000cc) and a Sh50,000 fuel allowance.
The taxpayer will also maintain the vehicles and replace them every four years.
There is also full medical cover for the PM (for life), the spouse (for as long as the spouse lives) and all children under 18 years.
The retired VP and PM will have a personal assistant, secretary, cook, butler, gardener, cleaner, two drivers and two security officers, courtesy of the taxpayer.
Former Kenya Anti-Corruption Commission boss Aaron Ringera enjoys the same perks he used to have while heading the anti-graft unit.
These include chauffeur-driven limousines and bodyguards for the next 10 years.
The contract was signed between him and the Kenya Anti-Corruption Commission Advisory Board.
The document, which the Saturday Nation was reliably told cannot be revised without breaching the contract, entitles Mr Ringera to continue using the vehicles he used as Kacc director.
Also at his service are a driver, a bodyguard and a security officer at his home.
Maintenance of the vehicles, including fuelling, is also paid for by the taxpayer.
Work tickets in our possession show three GK vehicles — two Mercedes Benz and a Prado — as having been used by Mr Ringera as late as last week.
The documents bear the Kacc stamp with Mr Ringera signing for each journey as the authorising officer.
An official familiar with the contract said it was signed by the previous Kacc Advisory Board chaired by Mr Allan Ngugi and does not allow for revision by the current one headed by former Law Society of Kenya chairman Okong’o Omogeni.
Mr Ringera resigned after days of relentless pressure from the body’s advisory board, civil society, politicians and Kenyans.
While current office holder PLO Lumumba may not go away with exactly the same perks as his predecessor because of the manner the latter left office, the perks may not be any different given his high pay of Sh2.5 million a month.
The Akiwumi Commission gives the Speaker of the National Assembly Sh240,000 per month as pension, one year non-taxable salary amounting to Sh3.6 million per term subject to a maximum of two terms amounting to Sh7.2 million.
The new Constitution, however, requires all public officers to pay taxes.
He will also get a house allowance of Sh200,000 a month, two armed guards on request, a car — a Mercedes Benz E240 or a vehicle of equivalent value maintained by the State, which shall be valued after every three years.
The Speaker will get fuel allowance of Sh25,000 a month and a driver to be paid by the State.
Enquiries by the Saturday Nation revealed that former Speaker Francis Ole Kaparo takes home an accumulated amount of Sh354,000, which the Cockar Commission gave him.
The National Assembly and Remuneration Act, says an MP gets a winding up allowance at the end of five years, irrespective of whether he or she is re-elected or not.
This is now Sh300,000 per year, which translates to Sh1.5 million for the five years and is paid as a lump sum.
Given that there are 222 MPs, taxpayers will part with more than Sh300 million.
This figure is expected to rise exponentially with the increase in constituencies and incoming senators in the next Parliament.
The Exchequer this year began paying millions of shillings in lump sum and monthly payments that will see some former MPs earn more than Sh400,000 each month for the rest of their lives after the Treasury invoked the Parliamentary Pensions Act Cap. 196, which governs payment of MPs’ pensions and gratuities.
The law stipulates that an MP who served only one term will be paid pension refund but members who served more than one term will be paid a lump sum on application for the pension, which will thereafter be followed by monthly payments.
Top among the beneficiaries of the retirement law passed in June 2002 are MPs who have served for five terms, and these include former Keiyo South legislator Nicholas Biwott and former Speaker Mr Ole Kaparo.
The former speaker qualifies for a lump sum payment of Sh6.4 million besides a monthly payment of Sh405,000 for the rest of his life.
Five-term MPs will retire with a lump some package of Sh4.6 million and earn a monthly pension of Sh290,000 for the rest of their lives.
Economists warn that the real import of the pensions law is likely to be felt in the next 15 years when more than 300 MPs expected to have been sent packing by their electors qualify.
The strain will be felt in the Consolidated Fund, which will finance the pensions burden given the high rate of turnover in Parliament.
During the last General Election alone, only 71 members out of the 210 MPs who served in the Ninth Parliament made it to the 10th.
This means that the 139 MPs who were kicked out must be paid their lump sum pensions beginning this financial year.
MPs have a contributory scheme to which they pay 12.6 per cent of their earnings, with the government contributing an additional 25.4 per cent.
Each MP’s pensionable emolument is calculated from the total salary, perks for responsibility, constituency and house.
The annual pensionable emolument of an ordinary MP stands at Sh3.8 million while that of ministers and assistant ministers amounts to Sh4.2 million and Sh3.9 million, respectively.
Early this year, the Finance ministry’s pensions department issued a notice to all the former MPs asking them to file claims for payments of gratuity, pensions and other benefits.
“The Pensions Department will process benefits for MPs who were not re-elected to the 10th Parliament,” said the notice.
For example a former MP who served only one term will take home Sh4.4 million in pension refund.
But if the MP was a minister, he or she would take away Sh5.5 million. A one-term MP who was an assistant minister would earn Sh5.2 million.
Twenty ministers were voted out of Parliament while 25 assistant ministers did not make it to the 10th Parliament.
From this group alone, five ministers were first time MPs meaning that Treasury will part with Sh30 million.
Fifteen of the assistant ministers who did not see the inside of the current Parliament were first time MPs and will take home a cumulative Sh75 million.
The ministers and assistant ministers who were felled but had served more than one term in Parliament will take home about Sh200,000 more than the ones who served one term.
A minister who served more than two terms is entitled to a lump sum pension payment of Sh1.5 million besides a monthly payment of Sh95,000 for the rest of his or her life.
For an ordinary MP who served two terms, a Sh1.4 million cheque would be drawn on his name and he will be lining up at the pensions department at the end of every month for a Sh90,000 payment.
The MPs who served three terms and more would earn Sh142,000 every month in pension.
In rough estimates, taking into account that 142 MPs — who include seven nominated ones — did not make it to the 10th Parliament, the government will spend about Sh12.7 billion in monthly pension payments on them, assuming that all of them were two time legislators.
The Consolidated Fund Service was allocated Sh129.1 billion in the 2007/2008 budget. It is from this kitty that MPs draw their salaries and the same that will fund pensions for retired MPs.
Former MPs who spoke to the Saturday Nation admitted that they were already drawing the pensions from the Exchequer.
According to the chairman of the Public Accounts Committee, Dr Boni Khalwale, retirement benefits are a huge burden on the taxpayer, especially taking into consideration that younger people are getting appointed into top posts, most of which have two fixed terms and hefty severance terms.
“Even as we put everything on the shoulders of the Salaries and Remunerations Commission, we must remember that allowances and benefits must be seen to be in tandem with current economic realities,” said Dr Khalwale.
He said giving civil servants retirement benefits was the best practice all over the world but patriotism and honour for serving in such hallowed positions should be primary.
Dr Khalwale added that it was worrying that some leaders who were enjoying a cosy retirement at the expense of the taxpayer were actively engaging in politics, contrary to the law that granted them the benefits.
“Is it fair for example, to have a retired politician driving the same vehicle he was given to political rallies which further their interests?” asked Dr Khalwale.
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