By Andrew Loh
“Ministers are not given pensions, not the ministers after a certain age, similar to civil servants…. Civil servants after 1984, ‘86 no longer are paid pensions. They’re all on CPF, the same as ministers. So whatever other schemes are applicable to other Singaporeans will also be applicable to ministers.”
– NTUC Assistant Secretary General and MP for Jurong GRC, Halimah Yacob, 93.8FM, 29 August 2007 (podcast)
It is curious why Mdm Yacob would make such a statement as the above – that “ministers are not given pensions”.
This is even more puzzling when you consider that various commentators have spoken about it, and even ministry and government officials have mentioned pensions for ministers.
Indeed, as recently as 2004, the then Deputy Prime Minister Lee Hsien Loong had even clarified in Parliament that ministers do still receive pensions. In fact, some of them are receiving both pensions and salaries! (link)
Perhaps Mdm Yacob has confused the freeze on pension sums (since 1994) given out to pensioners, with any cancellation or abolishment of the scheme itself – as clarified by the Public Service Division:
“Since 1994, the pensionable salary component at each grade has been frozen. All subsequent salary increases, whether in the form of monthly adjustments or increase in annual components, are non-pensionable.” (AsiaOne)
However, even though the sums themselves have been frozen, it does not mean that the pension scheme is no longer in practice.
Another misunderstanding, on the part of Mdm Halimah, could also be the difference between the Civil Service and the Administrative Service – or Office Holders. Pensions for the Civil Service has indeed been “phased out” since 1986 but pensions for the Administrative Service (which includes Ministers) are retained.
In 2007, in a letter to the Straits Times, the Public Service Division (which is under the Prime Minister’s Office) said:
“… the pension scheme has been retained for Office Holders, namely, Speaker, Ministers, Ministers Of State, Mayors, Parliamentary Secretaries and Political Secretaries.” (PDF file)
For further certainty, here are several commentators who have spoken about the pension scheme for ministers. Perhaps the NTUC’s assistant secretary general would like to read them and clarify her misleading statement on the radio programme.
The Singapore Mayor: A legitimate ticket to a Parliamentary pension? – By The Workers’ Party chairman, Sylvia Lim. (link)
Reaction to MOM’s statement on State pension – National Solidarity Party (link)
Ministers get pensions too – Alex Au. (link)
PSD dispels myths on ministers, civil servants pay. (Asia One)
Annuities for Singaporeans, pensions for ministers? – (Andrew Loh)
Transcript from the 93.8FM radio programme. A caller, Joseph, asked Mdm Yacob about the “double standards” of making Singaporeans buy annuities while ministers receive pensions:
Joseph: I just want to find out because there’s been a lot of talk, on the Net and in Singapore about the proposed annuity scheme… One of the looming questions is that ordinary Singaporeans are forced to take on this annuity scheme but ministers have this retirement scheme where they have guaranteed pensions. We’re talking about very well-paid ministers who get paid $1.5 million a year and they’re getting $150,000 a month and all this at tax payers’ expense.
On the other hand, we have the man on the street who has barely enough money in his CPF to make ends meet and then be forced on this annuity scheme. There seems to be two standards here. So I am just wondering how do you reconcile the two very wide standards, you know.
DJ: Mdm Halimah, double standards – in terms of how ministers are treated, public servants are treated, and how the rest of us are treated.
Mdm Halimah: Thank you, Joseph, for the question but I think there’s probably a misunderstanding. Ministers are not given pensions, not the ministers after a certain age, similar to civil servants. Civil servants, after 1984/86, I think, no longer are paid pensions. They are all on CPF. The same with ministers. So whatever schemes are applicable to other Singaporeans will also be applicable to ministers, will be applicable to civil servants.
Now, the question is: Are Singaporeans being forced to save? Well, the compulsory annuity is meant …we have to look at the objective. ..I want to come back to the objective and I hope that Singaporeans and all callers will focus on the objective. The objective is really to save, to help Singaporeans because we’re living longer, we need more retirement income. So that’s the purpose of the annuity, really.
The Public Service Division’s responses to comments from the public, April 2, 2007. Asia One.
Q: Do ministers and AOs receive pensions?
A: Only those who have served at least eight years as an office holder (for example, minister or minister of state) qualify for a pension.
Since 1994, the pensionable salary component at each grade has been frozen. All subsequent salary increases, whether in the form of monthly adjustments or increase in annual components, are non-pensionable.
The pensions for ministers are not calculated based on the total annual salary package each year.
Bonuses, allowances and other annual salary components are not included in the calculation of the minister’s pension.
Only the pensionable portion of the minister’s monthly salary is used and the actual pension also depends on the length of pensionable service. Currently, only about half of the monthly salary of a minister is pensionable.
As for post-retirement medical benefits, all office-holders, including ministers who qualify for pensions, continue on the Medisave-cum-Subsidised Outpatient Scheme. They do not get free medical after retirement.
For administrative officers to qualify for a pension, they must have served for at least 15 years. But they lose the pension once they resign from service.
As with ministers, only about half of AOs’ monthly salaries are pensionable.
Also, MPs appointed after Jan 1, 1995 are no longer eligible for pensions.