Taxpayers will have to dig deeper into their pockets if members of Parliament (MPs) successfully change the law to allow the Minister of Finance to increase their pension contribution from the current five percent to 15 percent.
The increase would mean government doubling its contribution to 30 percent because the provision on pensions for MPs in the National Assembly (Emoluments) Act states that government contribution would be “an amount equal to twice the total of the sums payable”.
The current contribution by MPs is “a sum calculated at the rate of five percent of such payment”.
If successful, the move would exert pressure on the government coffers at a time when it is struggling to migrate civil servants to the contributory national pension scheme, six years after the Pension Act came into effect because it requires billions of kwacha.
Minister of Finance, Economic Planning and Development Goodall Gondwe has allocated K63 billion to implement the first phase of the pension migration for civil servants who are 35 years old and new civil servants joining the service.
The Accountant General has since asked for an additional K7 billion for the new pension scheme.
The planned motion is due to be moved by Chitipa South MP Werani Chilenga (People’s Party-PP).
Justifying the proposed motion, chairperson of the MPs’ Welfare Committee, Alex Major, said they have observed that former MPs are struggling financially because of the low pension contribution.
He said the increase would ensure that MPs live comfortably at the end of their term as their reserves will have increased.
According to the notice of the private member’s motion distributed in the House, the motion would be moved to allow for a private member’s bill to amend the National Assembly (Emoluments) Act.
Reads the motion: “…with a view to raising the rate of contribution from the current five percent to 15 percent and that on adoption of this motion, National Assembly secretariat must assist drafting of the private members bill in accordance with Standing Order 122 .”
However, the notice of the motion did not appear on order paper, prompting the Business Committee, comprising leadership from the government and main opposition political parties Malawi Congress Party and PP to convene for an hour to discuss the way forward.
Speaker of Parliament Richard Msowoya told the House that lawyers, including the Clerk of Parliament, advised that the motion would be irregular without consulting the Minister of Finance first.
The Speaker said a meeting has been arranged with the Minister of Finance during tea break today and advised that the motion will only be moved after that.
Reacting to the plans, Treasury spokesperson Alfred Kutengule said such a change in the laws would have an impact on the execution of the budget.
He said: “This would mean reducing other allocations to cater for the pension contributions. Where does the government get the extra resources for that? It would be difficult to sustain.” n