MPs want protection for their pension

Feb 03, 2010

MPs have drafted a bill that wants to protect their pension benefits from being taxed or attached in case of bankruptcy.

By Catherine Bekunda and Henry Mukasa

MPs have drafted a bill that wants to protect their pension benefits from being taxed or attached in case of bankruptcy.

The Parliamentary Pensions Bill 2010, will be tabled by the national economy committee chairperson, Stephen Mukitale, as a private members’ bill.

“The person shall continue to receive the pension and the pension shall not be subject to attachment under insolvency laws,” reads the bill.

It also wants to provide a formula through which pensions can be calculated.

“Pension benefits have not been paid out to retired MPs and parliamentary staff since the enactment of the Act in 2007. The Act lacks a formula to calculate the benefits,” Mukitale said on Tuesday while moving a motion to allow him introduce the bill.

“It has been difficult for the board and the managers to pay benefits to the members because the Act is inadequate to cover the details needed to compute the benefits. We hope this hybrid cash balance scheme will help us sort out the problem.”

Beneficiaries will be former MPs who served between 2001 and 2006, in the 7th Parliament.

The Act, which was passed in 2007, provides for the establishment of the parliamentary pensions fund.

By February last year, the fund had accumulated to sh9b and was expected to hit sh23b by June 2009. Parliament started the scheme in 2006 to help members save money for their retirement.

If enacted, the bill will amend the 2007 Act and direct the pension board to report to the annual general meeting instead of Parliament.

The scheme caters for all MPs, whether elected or ex-officio, and members of staff of the parliamentary commissions who are not on contract terms.

However, an MP who is also a vice-president or a prime minister, cannot benefit from the scheme.

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