Uhuru ministers walk away with millions in farewell pay


Economy

Uhuru ministers walk away with millions in farewell pay


cabinet

A past cabinet sitting chaired by retired President Uhuru Kenyatta on May 12, 2022. PHOTO | PSCU

Cabinet Secretaries who served in President Uhuru Kenyatta’s government will walk away with up to Sh20.8 million each in gratuity payment amid questions over the integrity implications of their relatively low exit packages compared to that of the other super-earners in public service.

Principal Secretaries (PSs) – who are the administrative heads at each State department – will also earn near similar amounts for those who have served since 2013 when Mr Kenyatta rode to power.

The payouts came after President William Ruto, who was sworn in as head of state on September 13, formed his 22-member Cabinet in a sweeping overhaul of the Executive in which only one of Mr Kenyatta’s ministers was retained.

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This golden parachute to ministers and PSs is premised on the fact that they are not entitled to pension, but gratuity equivalent to 31 percent of annual basic pay for every year served.

Unlike other State officers such as a Deputy President, Speakers of Parliament and a Chief Justice, Cabinet Secretaries and PSs are not entitled to lifetime pension, top-of-the-range vehicles and juicy perks upon exiting the public service.

Analysts reckon that lack of adequate retirement benefits pension could compromise the integrity of the Cabinet Secretaries who control billions of shillings.

“A State officer serving on fixed term shall serve on contract and be paid a service gratuity at the end of the term at the rate of 31 percent of annual basic pay for every year served,” the SRC said in a gazette notice, which set the pay details for the current administration.

The outgoing ministers who have served from when Mr Kenyatta’s first Cabinet that was sworn in mid-May 2013, including Raychelle Omamo, James Macharia, Amina Mohamed, Fred Matiang’i, Najib Balala and Adan Mohamed, are set to pocket Sh20.8 million each in gratuity.

This means a Cabinet Secretary who served from 2013 and earned a graduated salary of between Sh792,000 to Sh1,056,00 took home Sh10.3 million in gratuity payment at the end of 2017.

In the second term where the Cabinet Secretaries earned Sh924,000 monthly, the individual will take home Sh10.5 million.

This brings the total amount that a Cabinet Secretary who served consecutively for the two terms to Sh20.8 million.

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Those who took office in December 2015 following a shuffle such as Joe Mucheru will get a farewell package of nearly Sh15 million.

The Cabinet Secretaries who served only in Mr Kenyatta’s second term, and earned a monthly salary of Sh924,000, will each receive Sh10.47 million in gratuity.

But some analysts say that the exiting Cabinet Secretaries are hardly short of cash.

Pension experts say the Sh10.47 million could guarantee the Cabinet Secretaries a monthly pay of Sh45,000 if they opted to invest the money in pension annuities — a product that pays an investor a regular income for the rest of their life.

This is a far cry from the monthly pay of Sh924,000, perks and round-the-clock security enjoyed by the Cabinet Secretaries while in office.

Other top State officers in the Judiciary and Executive such as deputy presidents, Speakers and Chief Justice, receive hefty retirement perks, including a monthly pension, cars, drivers, fully furnished offices, cooks, messengers, personal assistants and police bodyguards.

President Ruto on Tuesday appointed the 22-member Cabinet rendering jobless about 20 Cabinet Secretaries who served under Mr Kenyatta until September 27, 2022.

Only Simon Chelugui was retained as Cabinet Secretary for Cooperatives and SMEs while Monica Juma, who served in the Energy docket in the second term of Mr Kenyatta’s administration, was named the Security Advisor to Dr Ruto’s Cabinet.

Former central bank Governor Njuguna Ndung’u was nominated to lead the Treasury in the face of the country’s burgeoning debt and surging cost of living.

Dr Ruto also named ex-Finance minister Musalia Mudavadi as Prime Cabinet Secretary in an Executive team that includes seven women.

The Salaries and Remuneration Commission (SRC), which sets wage levels, is currently battling former county governors and their deputies who wanted to pay themselves up to Sh2.3 billion annually in retirement perks.

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The SRC, which advises the government on the wages of public sector officials, says the payout is not sustainable and is an additional burden to taxpayers.

County governors and their deputies are seeking a lifetime monthly pension of Sh739,200 and Sh700,000 respectively in line with the payouts offered to retired presidents, deputy presidents, chief justices and parliamentary speakers.

Besides the monthly pay, they are seeking a lump sum payment equivalent to their one-year pay, a 3,000cc four-wheel-drive car, fuel allowance, a driver, a personal assistant and medical cover for local and overseas treatment.

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