Mthuli Ncube makes pension adjustments for career MPs
Finance Minister Mthuli Ncube has proposed to use the Finance Bill to exempt legislators who are above 70 years from contributing to pensions while allowing them to draw their pensions.
The proposals are contained in Clauses 36, 37, and 38 of the Finance Bill which is currently before the National Assembly.
Currently, legislators who served two Parliamentary terms and are no longer in Parliament are entitled to a pension.
Below is the full text of what Minister Mthuli Ncube said concerning the issues:
Mr. Speaker Sir, I now turn to Clauses 36, 37, and 38 in the Finance Act. This pertains to the Hon. Members present in this august House. We were trying to assist them. Before I just read what is in here in terms of my notes, I want to explain a situation. There are Members of Parliament who have been MPs since 1980 and they are still serving as Members of Parliament. So what is happening is that they are not young people. You have a situation where they keep winning elections. These Members of Parliament are prejudiced because they just keep contributing to the pension fund. They never even try to draw down from that pension fund.
So we want to correct this situation and it will help those very successful Members of Parliament who keep winning elections so that they are able to start drawing down from the pension fund after having contributed for so many years. That is what Clauses 36, 37, and 38 in the Bill are trying to assist with and that is all, but in the current situation for anyone else who has not been as fortunate with their winning record, it still remains that you receive a pension only after serving two terms as a Member of Parliament.
So the proposed amendment through this Bill to Parliamentary Pensions Act seeks to address deficiencies identified in the Act to the Parliamentary Pensions Act Chapter 2 (21). Currently, the Act does not provide for a pensionable age for Ministers and Members of Parliament. It mainly provides for the payment of pension on the qualifying service, which is the two-year term as I explained. There is a Clause 36 which seeks to allow Members to become pensionable at the age of 70 years. The amendment also provides that any service rendered beyond 70 years becomes non-contributory. That is all we are trying to suggest. Hopefully, Hon. Members will find it helpful.
Currently, a person who is receiving any State pension and becomes a Minister or Member of Parliament is not to be entitled to receive a pension during the period which he/she holds such office. The Act currently provides that any Member who contributes towards a second pension during the period of his/her initial pension is cancelled or suspended upon vacation of office. Their pension is calculated on the basis of the post they last held.
There is Clause 37 in the Bill which also include option to allow those pensioners who become Members in terms of the Parliamentary Pensions Act and are already on pension, to opt to continue receiving their pension without contributing towards a second pension. The new assignment would therefore be a non-contributory basis. There is a subsection on Clause 38 to buttress what I have explained. Clause 38 seeks to include a new section and provide an option for a Minister, Deputy Minister, Member of Parliament who is re-elected and appointed at a higher post than he/she previously held and is already receiving a pension in terms of that previous service to contribute to the Government pension on condition that the existing monthly pension payments are seized.
Upon vacation of the re-elected office, the pension will be re-calculated using the latest post the Member held. This option should only be exercised whilst a Member is still serving and it is an option. The new amendment will ensure that the Act is aligned to other statutes, thereby addressing a number of deficiencies in the Parliamentary Pensions Act Chapter 2 (21) as well as improving the welfare of the beneficiaries. On Clause 40 of the Bill, we present revision of the amounts in the Revenue Act. The effect of these revisions is to revise monetary values in the various tax statutes. I thank you Mr. Speaker Sir.
Mthuli Ncube makes pension adjustments for career MPs
