Both George Yeo, 57, and Lim Hwee Hua, 52, have announced their "retirement from politics". Since both are below the oft quoted retirement age of 62 for lesser mortals, the question arises if both of them are eligible for "retirement benefits".
The Parliamentary Pensions Act (Chapter 219) provides for the grant of pensions and gratuities in respect of service as Members of Parliament and as holders of ministerial and other offices a.k.a. "office-holders".
The pensions in respect of office holders (which covers "Prime Minister, Deputy Prime Minister, Speaker, Senior Minister, Minister, Senior Minister of State, Minister of State, Mayor, Senior Parliamentary Secretary, Parliamentary Secretary or Political Secretary") is spelled out in Section 4. A office holder may be granted a pension if he ceases at any time to hold office and has -
(a) not less then 8 years' service
(b) attained the age of 50 years
The annual amount of pension payable to an office-holder shall be one-twenty-seventh (1/27) of his annual salary in that office for every completed year of service in any office, subject to a maximum of two-thirds (18/27) of the highest annual salary of any office.
The pension granted under this section shall continue for the life of the person or until he is again an office-holder.
George Yeo has 23 years of service, office holder since 1988. Lim Hwee Hua has 15(?) years of service, office holder since 2004, when she was appointed Minister of State for Finance and Transport. Yeo is definitely "in the money" as he meets the 8 year requirement. Since his highest annual salary was drawn as a 2 million dollar minister, he is set for life. Lim was appointed minister of state on 12 August 2004, so the computation for her gratuities may fall under Section 3, "Pensions in respect of service as Member". That may be incentive to change her mind and run for office again in 2016. Unless she's satisfied with the Section 6 provisions which count her less than 8 years service in office as additional pension for Member's service.
All this money talk may have piqued you to wonder about the "old timers". Section 5 of the Act caters for those serving officer-holders who have attained 55 years of age. Provided the office holder has not drawn a pension under Section 4, he may be granted a pension notwithstanding the fact that he has not ceased to hold office. Now there's one good reason why a 87-going-on-88 year old was contesting in this year's general election.
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For MP's pension under Section 3, the MP must have been first elected before 1995. If the MP was elected after 1995, he or she is entitled only to be paid CPF. Lim Hwee Hua was elected as MP in 1997, so she is not eligible under Section 3. And since she hasn't served for 8 years as an office holder, she is also not eligible under section 4.
ReplyDeleteThe above doesn't apply to George Yeo. He is entitled to both pension as MP and also pension as a Minister! But, if truth be told, the Minister's pension is not as much as 2/3rd of $2 million. It is the pensionable portion that is counted for pension. A few years ago, the Public Service Division said that for an entry level minister at MR4 earning $1.2 million, the pension is $176K per year (FOR LIFE! and it is TAX FREE!). GY as a senior minister would therefore get much more than that, combined with his MP pension.
By the way, your statement "The pension granted under this section shall continue for the life of the person or until he is again an office-holder" is not quite correct. Under Section 5, if the office holder is eligible for pension and is also still in service, he is entitled to collect both his full salary and his pension at the same time. LHL confirmed this in Parliament in answer to a question by Steve Chia in 2006.
May 12 and 13 posts were affected by "problems" at this site, so comments apparently have been deleted. Sorry, guys.
ReplyDeleteNo problem Tattler. I thought for a moment, whoever is collecting payment from bloggers is insisting "money is not enough"
ReplyDeleteBut seriously, GYeo, Lim HH, Cynthia, etc are a bunch of hypocrites. The day they embrace the PAP, is the day they compromise whatever principles they may have. GYeo may have some to start with, but I doubt HH or Cynthia had any to begin with, same for newbies like TinPL, JPuthu, FooMH........
In my opinion, the government should stop linking minister pay to private sector pay.
ReplyDeleteThe US financial crisis has shown to all that high pay and big bonuses will lead to irresponsible risk-taking of fund managers for short term profits.
What we need is a long term planning. The government is not a company. Any remuneration that encourages excessive risk-taking is wrong.
The government should par down the annual salary and keep the pension. This way, we can hold all ministers accountable for their policies and revoke their pension if they failed in their duty.
The "pensions and gratuities" speaks volume of our government. This shows their true self, their sincerity and honesty. They kept the best for themselves and deprived the citizens of the same. They took the pension away from alomost all but kept it for themsleves. What kind of men are these..you decide
ReplyDeleteClarification:
ReplyDeleteTheir pension is determined based on the pensionable component of the monthly salary, which has been frozen since 1994, the PMO said in the letter signed by Tan Kee Yong, secretary to the Prime Minister.
http://sg.news.yahoo.com/blogs/singaporescene/dpm-teo-dispels-seven-digit-pension-payout-rumours-042754100.html
Part 1;
ReplyDeleteThe PMO's reply is really lame.
They confirmed that serving office holders past 55 years old who are eligible for pension can collect both salary and pension. They claim that they will be looking into this (why only now when it was so obvious that it was ethically wrong ab initio).
Information about pensions is not a matter of public record. The public's only source of information is the Statutes of Singapore online, which is found on the AGC website (http://agcvldb4.agc.gov.sg/ (where the Parliamentary Pensions Act can be viewed). The Act expressly states that the pension is based on the "highest annual salary of any office held by him". What is the reasonable reader to make of this statement. There should be transparency in the application of laws, and the public, having knowledge that ministers make over $2 million and the PM makes over $3 million, can be forgiven for making the calculation that they did.
The PMO also said that the pension amount is about 10% of the minister's salary, without saying how much it was. Yes, the Public Service Division (PSD) had said in 2007 that entry level ministers who were then paid $1.2 million (now very much higher) would be eligible for a maximum pension of $176,000 a year if they served 18 years (BUT not necessarily as minister for 18 years. He could have been a parl secretary for 17 years, and minister for 1 year, and he will be paid minister's pension for life). P.S. looking for that PSD statement is like looking for a needle in a haystack! Anyhow, what about the amount for the higher paid ministers? It would be correspondingly more! Well, going from the PMO's reply, LHL's ministerial pension will be $380,000 per year tax-free for life. Still not too shabby. Don't forget that, in addition, he also gets his MP pension as he was elected pre-1995.
Part 2:
ReplyDeleteIf you think about it, if the pension is 10% of the minister's total salary, and pension is based on 2/3rds of the pensionable portion of his salary. Simple maths tells me:
1/10 Salary = 2/3 Pensionable Salary.
Pensionable Salary = 3/20 (or 15%) Salary.
Conversely, non-pensionable salary (meaning performance bonuses, GDP bonuses, non-pensionable allowances, and other mysterious bonuses) is 85% of the Salary
Is this a logical or responsible manner of remunerating public servants? They are already the world's highest paid politicians - and we have the world's highest paid politicians. Do they still need a pension that is one-tenth their highest annual pay?
The PMO also deftly avoided saying that ministers like his boss (the PM) and many others like the PM in the Cabinet who were elected before 1995 were entitled to 2 pensions because they will also get MP's pension! The PMO has never explained how parliamentarian's pensions (for those first elected before 1995) is calculated. It is widely believed that an MP's monthly allowance is $15,000 per month. Actually, with the deposit payable at this year's GE being $16,000, and the law (Parliamentary Elections Act, section 28) stipulating that the deposit must be "a sum equal to 8% of the total allowances payable to a Member of Parliament in the preceding calendar year, rounded to the nearest $500.", it means that last year, MPs each received $200,000 in allowances [ tax-free, mind you!]. So, that means another 2/3rds of that amount for life for anyone who has been an MP for 20 years or more!
What the article also did not refute was that the pensions are tax free, and can be collected in one lump sum, also tax free. Why should that be so? The original intention of exempting pensions from income taxes was probably that the pensions were smallish amounts which, being the only income of the civil servant after retiring, would have probably fallen under the minimum income threshold at which tax is payable.
How many people in Singapore in active employment or self employment earn $176,000 a year, and it is guaranteed for life, tax free? I worked out that based on this year's income tax rates, the income tax that a person earning $176,000 would have to pay is $18,220.00. Why should a minister or ex Admin Service officer getting $176,000 or more be exempt from having to pay income tax on this obscene amount of pension?
Do you also know that before estate duty was abolished, parliamentary pensions were also exempt from estate duty?! What is very clear is that the PAP believes in the principle: One law for them, and another law for the rest of us.
The pension for the entry level minister who has served 18 years (not necessarily all as minister; in fact he could have been a parliamentary secretary for 17.5 years and minister for 6 months) is $176,500 a year, tax free, for life. The pension for more senior ministers and the PM is of course much higher.
ReplyDeletePlus, they also get MPs pension as most of the outgoing cabinet were elected MPs before 1995. So, they are eligible to 2 tax free pensions for the same duration of work.
Plus, they can do whatever work they wish after leaving office, and they will still get their pensions.
Makes a mockery of the pensions concept, which is to ensure that public servants who cease or are unable to have employment after a lifetime of sacrifice for the State at a financially disadvantaged salary will have something to live on for the rest of their lives. Under our system, the pension is to allow the PAP and elite Admin Service to continue to raid our reserves after their "retirement".