The large sums of money that are paid to MPs as gratuity at the end of each Parliament`s life does not go down well with the general public. Some Ghanaians consider it as unfair compensation compared to the paltry lump sums of money that are paid to public sector workers upon their retirement.
There is also the notion that the people`s representatives go into office to take advantage of the availability of these lump sums, and this perception is contributory to the general lack of trust by the general public in the Parliamentary Institution. The reality of the situation seems to be that these lump sums may not be doing the retiring MPs much good in the long term. The lump sum stands the risk of being exhausted within a short time, thereby putting a former MP in financial difficulties, given that not all of them may have the financial wherewithal to sustain themselves after leaving office.
Instead of such gratuity, some countries have established pension schemes for their honourable members of parliament. India, which is the largest democracy in the world has such a scheme in place. The Salaries and Allowances of Members of Parliament Act, (No. 30) of 1954 makes provisions for MPs` salaries, allowances for journeys abroad, travelling and daily allowances, housing and telephone facilities , additional facilities, among others. Regulations pertaining to the payment of these emoluments have also been made. The Act has since been amended several times to upgrade the emoluments and facilities of members of the legislature.
On the African continent, some countries including South Africa, Kenya, Uganda and Zambia have pension schemes established by statute in place for retired MPs. In South Africa, the Members of Parliament and Political Office – bearers Pension Scheme is established by Act 112 of 1984, to provide for matters connected with pensions for retiring MPs and other ‘’political office- bearers’’. Under the Act, seven per cent of every MP and political office – bearer`s “pensionable salary“ is deducted and lodged in the State Revenue Fund as their monthly contribution towards their pension. To qualify for a pension, the contributor must have served in Parliament for at least seven and a half years or been a member ‘’during the full duration of at least two successive Parliaments…’’. In addition to the pension, the former MP is also entitled to a gratuity.
In Kenya, the Parliamentary Pensions Act, Act, Act 12 of 1984, also establishes a pension scheme for MPs. The Act makes provisions for pensions for ‘persons who have been members of the National Assembly and their dependants’’. Clause 4(1) of the Act stipulates that there shall be deducted from the‘’ pensionable emoluments’’ of each Member of Parliament a contribution of twelve per cent towards pensions. Like the South African scheme, these contributions are lodged in the Consolidated Fund. To qualify for the pension, an honourable member`s ‘’aggregate period of reckonable service ‘’should, according to clause 8(b) of the Act,be equal to two terms of Parliament. The Hon Member should also attain the age of forty five years. The Act also makes provisions for pensions for honourable members who may retire on grounds of ill health, death before retirement, pensions payable to widows, widowers and children of deceased honourable members.
There have been amendments to the Kenyan Act to improve upon the conditions catered thereof. The latest one, the 2019 amendment Bill sought to provide for ‘’lump sum enhanced pensions’’ for former MPs who served between 1984 and 2001. According to the Minority Leader of the Kenyan National Assembly, John Mbabi, who sponsored the Bill, the Bill was passed to enable “former MPs to get something to sustain themselves“. Indeed, the aim of establishing a pension scheme for honourable MPs should be to cater for their wellbeing once they leave public service; indeed, they are honourable men and women.
In Uganda, the Parliamentary Pensions Act, 2007 like that of the Kenyans, makes provision for a ‘‘contributory pension scheme for Members of Parliament and members of staff of Parliament“. Towards the implementation of the Scheme, the Act also establishes the “ Parliamentary Pension Fund for the payment or granting of pensions or retirement benefits to Members of Parliament and members of staff of Parliament“. As a contributory scheme, there is a monthly deduction of fifteen per cent from each honourable member’s ‘pensionable emoluments ’. On its part, the Government of Uganda contributes thirty per cent of the monthly pensionable emolument of each Member of Parliament to the Scheme. Benefits are paid, according to clause 12 (1) of the Act, to an honourable member “who retires or ceases to be a member on or after attaining forty five years of age , subject to service as an honourable Member for a continuous period of five years or more“. Similar to the Kenyan Scheme, provisions exist in the Act for the payment of benefits upon the retirement of an honourable member on health grounds or to the widow or widower of a deceased member. The Act establishing the Ugandan scheme has also been amended over the years to improve upon the benefits stipulated. The amendment (number 2) of 2011 specifies the benefits that are due a person who exits the house as either Speaker or Deputy Speaker. Other African countries including Zambia have similar schemes.
It is clear from the foregoing discussion that the schemes available in all the three African countries cited are contributory ones. In other words, MPs in all three countries cited contribute part of their monthly salaries towards their pensions. Not even a relatively prosperous country such as South Africa doles out public funds as either gratuity or pension to honourable members without members` contributions. Why is there a contribution – free gratuity for MPs in Ghana? Why not a contributory pension scheme?
The only barrier to establishing the scheme is the provisions of article 71 (1) of the 1992 Constitution, which states that the President shall determine the salaries and allowances payable , and the facilities , and privileges available to the Speaker, Deputy Speakers and members of parliament , on the recommendations of a committee appointed by the President. But there is a way round this: In place of these unpopular and non-sustainable lump sums, the President may use the committee that he is obliged to form as a special purpose vehicle to propose a comprehensive, long term legal policy (a Bill before Parliament) that embodies all salaries, allowances and facilities that are due our honourable Members of Parliament. The highlight of this package, could be a pension scheme for our honourable MPs.
The pension scheme would appear to the public to be more reasonable as reward for our honourable members. They would appear to be earning something similar to whatever other retired public sector workers earn. The notion that MPs go into office to seek free lump sums at the end of their tenure would be debunked. The pension scheme would also be a more secure welfare package for retired MPs in the long run. In addition to the pension scheme, the nation could still honour our MPS with more economical amounts of gratuities when they are exiting the House.
The writer works as Deputy Editor of Debates in the Parliament of Ghana. Contact willingwe@yahoo.com.
By Harold Wilson Hubert
