Pensions of retiring ministers

Written Reply to Parliamentary Question on pensions of retiring ministers

Parliamentary Sitting: 21 November 2011

Mr Pritam Singh: To ask the Prime Minister (a) what is the amount (in monetary terms and detailed component breakdown) of the pension received by each retiring minister after the 2011 General Election; and (b) whether the aforesaid pension will be reduced retrospectively in light of the upcoming ministerial pay review.

Written Reply (for the Prime Minister) by Mr Teo Chee Hean, Deputy Prime Minister, Coordinating Minister for National Security, Minister in charge of the Civil Service and Minister for Home Affairs:

Pensions paid to ministers are computed in accordance with the Parliamentary Pensions Act. The Government has explained how pensions are calculated on several occasions in Parliament and through media releases.

Ministers have to serve at least 8 years as a political office holder to qualify for a pension. The pension is based not on the total monthly salary, but only on the pensionable component of this salary. The pensionable component has been frozen since 1994, and all salary increases have been added to the non-pensionable component to contain pension costs. Thus, the pensionable component has been decreasing as a proportion of total monthly salary. The annual components of salary (such as the 13th month payment, Annual Variable Component and Performance Bonus) are also not pensionable.

A minister qualifies for the maximum pension only after having served as an office holder for 18 years. The maximum annual pension is about 10% of his annual salary prior to retirement. The pension will be less if he has served for a shorter period.  The value of the pension that a minister may receive upon retirement is fully taken into account when ministerial salaries are set against the benchmark.

A Committee chaired by Mr Gerard Ee has been formed to review the salaries of political appointment holders which are to take effect from 21 May 2011. This includes a review of the pensions for ministers. The Committee has said that it expects to complete its work by the end of this year. The Government will take into consideration the Committee’s recommendations when deciding on the pensions for ministers.