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Government needs to urgently repeal the State Salaries, Pensions, Gratuities and Other Benefits Act, 2003.

13 May 2019 at 16:29 | 1968 views

Government needs to urgently repeal the State Salaries, Pensions, Gratuities and Other Benefits Act, 2003.

By Kortor Kamara, USA

The provisions of Part lll, Section 6 to 12 of ‘The State Salaries, Pensions, Gratuities and Other Benefits Act, 2003’, that established a pension scheme for Members of the Sierra Leone Parliament, separate and apart from the NASSIT, needs to be urgently reviewed and repealed if the country’s unfunded pension liability exposure is to be addressed.

The parliamentary retirement pension scheme, administered and managed by the Clerk of Parliament under the direction of the Speaker of Parliament provides that an MP qualifies for benefits when he/she has served for a period of 5 years or a single term in the the Parliament. The retired MP is thus ‘entitled to a monthly pension computed on a basis of an annual pension rate determined by a resolution of Parliament and prescribed by statutory instrument’. Also, the retired MP is entitled to a ‘gratuity equal to 17 percent of the cumulative total of all his salaries and allowances during the period served’.

Unlike the more renowned NASSIT pension scheme, the MP pension scheme is non contributory by the Members of Parliament and all benefits are however charged on the nation’s consolidated fund. In fact section 12 of the Act provides for payment of the gratuity and pension of a deceased MP to be payable to the widow, dependent child or relative.

Since promulgation of the 2003 MP Pensions Act, Sierra Leone has undergone elections in 2007, 2012 and recently in 2018 with a concomitant large turn over of Members of Parliament, all eligible for parliamentary pensions and Gratuities for the rest of their lives.

Double Dipping
Section 21(2) of the above Act further provides that the MPs “entitlement of pension under this Act shall not be affected by the receipt of pension under any other enactment”. Meaning that the prohibited and unconscionable practice of double dipping is codified in the legislation.

Despite the very generous pension scheme for retired members of parliament, the double dipping provision noted above makes this Act especially onerous and odious, when compared with the paltry sum and benefits paid to other retired state employees by NASSIT.

A retired MP case study
The Institute of Governance Reform ( IGR ) in Freetown, in a Policy brief dated November 2018, tabulated salaries and emoluments of Members of Parliament (MPs) at 60,000 US dollars (453,115,385.00 Leones) per annum or 300,000. 00 dollars over a 5 year parliamentary term.

Thus, in analyzing just the parliamentary turn over of 125 MPs since the 2018 elections, the nation has an unfunded liability of Pensions and Gratuities in the amount of $36,000 US dollars ( representing 60% of $60,000 salary & emoluments ) plus $51,000 ( representing 17% of gratuity of salary & emoluments over 5 years in the sum of $300,000 ) per retired MP. Thus for the retired 125 MPs, our pension liability exposure is the total of $87,000 per annum x 125 MPs =$10,865,000.00 ( Ten million Eight Hundred Sixty Five Thousand Dollars ).

Imagine a 30-year old MP who lost his or her parliamentary seat in 2018, aged 35 - this MP will be entitled to Pensions and Gratuities in the amount of $87,000 from the consolidated fund, for the rest of his life. Assuming such a retired MP lives on to the rip old age of 80 years, the country’s consolidated fund will be liable for his pensions and Gratuities for an insane 45 years totaling the obscene sum of $3,915,000.00 ( Three Million Nine hundred and fifteen thousand dollars).

Moreover, since section 21(2) of the said Act allows for “double dipping”, this retired MP upon retirement at age 35 can also obtain subsequent employment and be eligible for a second pension from his subsequent employer.

Short tail effect
The unsustainable nature of the pension liabilities scheme for MPs as mandated under the State Salaries, Pensions, Gratuities and Other Benefits Act, 2003 is further compounded by the short tail benefits payment structure to the retiring MPs, most of whom serve only single 5 year terms in Parliament and hence become eligible for benefits.

Sierra Leone’s economy cannot afford such unnecessary largesse as pensions to MPs, who even at the best of times are not deserving of such benefits and which our nation’s economy certainly cannot afford.

Repeal and incorporate the MP Pension Scheme into the NASSIT Scheme
In June 2018, President Julius Maada Bio publicly enrolled as a State employee with the NASSIT for Pensions. Why are the MPs not registered also, since they are also employees of the State?

If the president who is also entitled to benefits under the same antiquated and unconscionable ‘State Salaries, Pensions, Gratuities and other Benefits Act, 2013’ can so do, then it behooves the Ministry of Finance and Parliament to expeditiously repeal this heinous and budget busting pensions scheme for Members of Parliament in Sierra Leone.

The parliament has also been derelict in providing the public with the annual pension rate for retired MPs and how many MPs are receiving pension benefits. The Act provides for the monthly computation “on the basis of an annual pension rate determined by a resolution of Parliament and prescribed by statutory instruments”.

Sierra Leoneans need to be more proactive in these issues because the parliamentarians, who are the greatest beneficiaries of this pension largesse, cannot be expected to bring this flawed program to an end. Rather, civil society and the electorates must exert maximum pressure on the parliament to repeal such an unsustainable and unconscionable retirement benefit for MPs, which will soon bankrupt our country.