Monday, May 09, 2011

Minister's pension

A letter explaining the pension paid to ministers has been posted in SGEP. Here is the direct link.

Dear Kin Lian
As an actuary, I am sure you can easily quantify the amount paid out in a year or the amount needed to be set aside for this pension.  It would probably run into billions a year and the public has a right to know.   Let not forget this amount is for life and pay out of our tax money.

I am not against pension system.  I think it is a good social safety net for all Singaporean.   Previously, public servants are getting a pension because their remuneration are lower than the private sector so it is a way to compensate them.   However, since CPF was implemented decades ago, still PAP does not have a transition mechanism to migrate the pension system for Ministers to CPF system.   

While I think that we may not be able to stop these pension payment to those who have retired due to contractual reasons, we should at least push the govt to review the system so as not to burden our future generations with such huge financial obligation.   As you are keenly aware, The longer we wait, the compounding effect of this financial burden will increase astronomically.

Steve

4 comments:

SD said...

It is really outrageous if this is true!

Singapore's 5 Minute Investment Diary said...

Dear Hiei

It's not outrageous.
This is a democracy.

Our (Singaporeans') votes over the last 45 years allowed this to happen.

We've only got ourselves to blame.

Did you see today's (9 May) Straits Times Headlines?

"PAP leaders to mull over poll results"

It looks like Singaporeans have finally discovered a cure for deaf frogs.
It's called the ballot box.


"Perhaps the meek shall inherit the Earth, but they'll do it in very small plots . . . about 6' by 3'."
-- Robert A. Heinlein

"The only thing necessary for the triumph of evil is for good men to do nothing."
-- Edmund Burke

squeak said...

If i am not wrong, this does not apply to ministers elected after 1995, NCMPs or NMPs. It is not really outrageous but more of a reflection of the past where pensions were available for most civil servants. Feel free to check the definition of "Future Member" under the Parliamentary Pensions Act.

Vincent Sear said...

Actually I'm still unsure about the pension scheme. Most of civil servants and MPs don't have it anymore, as I understand and correct me if I'm mistaken.

Anyway I think we shouldn't be worried about pensions for millionnaire ministers. They don't need it. A national safety net pension scheme, I think, should be there for the self-employeds and lower incomes to supplement CPF.

Of course, next question would be where the money is going to come from. I'd suggest a percentage of CPF from personalised accounts to pooling to a national pension fund to be distributed evenly out as pension payments after retirement.

That means, on the standard and bigger portion of CPF, all still will get accordingly to what they've contributed through the years. But on the pensionable portion, the poorer will get more than what they've contributed and the richer will get less.

However, at retirement of the rich person, they don't really need pension, whereas the poor do.

Next question, how about those who committed full CPF-OA to housing? The seggegrated pension fund will generate return and in the first few years of transition period, this can be paid back in packages to relieve the burden just like GST packages to relieve GST hikes.

After the transitional period and in the long run, people will be less tempted with overstretching themselves to buy bigger property than they can comfortably afford.

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