Excessive Compensations of MPs

Stockist_Ang wrote:
In 1994, Prime Minister Goh Chok Tong received a monthly salary of nearly S$96,000 (about $1.15 million a year), while other ministers earned about $48,900 a month ($586,800 a year). This made them among the highest paid government ministers in the world.[56] In October that year, the Government issued a white paper entitled Competitive Salaries for Competent & Honest Government[57] which proposed that the salaries of ministers and civil servants be pegged at two-thirds the average principal earned income of the top four earners in six professions: accounting, banking, engineering, law, local manufacturing firms and multinational corporations. These professions were chosen because their top members had general management skills which ministers also had to have. According to the white paper, the one-third "discount" would be "a visible demonstration of the sacrifice involved in becoming a minister". Although "[s]alaries should never be the motivation for persons to become ministers", the financial sacrifice had to be minimized if outstanding and committed Singaporeans were to be encouraged to take on the "risks and public responsibilities of a political career".[58] The benchmark would also be used to determine the pay of the President, Prime Minister, Deputy Prime Minister, Attorney-General, Chairman of the Public Service Commission and judges.[58]

Following Parliamentary approval of the white paper in November 1994,[59] the Government established an independent panel to examine the benchmark for the Prime Minister's salary. The panel's report, released in January 1995, recommended that the benchmark be about $1.6 million a year, but said it would be reasonable for the Prime Minister to be paid $2.4 million in view of his heavy responsibilities. The Government said that in three years it planned to raise the pay of the Prime Minister to $1.46 million and that of ministers to 60% of the benchmark, and in the "longer term" to $1.6 million and two-thirds of the benchmark respectively.[60]

In February 1996 it was reported that a survey of 19 countries by the World Economic Forum magazine World Link had found that political leaders and senior civil servants of Singapore had the highest salaries. The pay of the Singapore Prime Minister (S$1.1 million, or US$812,858) was almost five times the average pay of the chief political executives of the nations surveyed (US$168,291). Senior civil servants were paid US$292,714, almost three times their counterparts' average pay.[61]

In August 2000, in view of the Singapore economy's growth of almost 10% led by a rapid increase in exports, the salary of the Prime Minister was increased by 14% and those of other ministers by 12%. In response to public disquiet, Goh Chok Tong said that, spread across the population, the rises amounted to about $11 per person, equivalent to "about five plates of char kway teow [fried noodles with cockles] per Singaporean".[62] Subsequently, in late 2001, when Singapore experienced its worst recession in a generation, ministerial pay was reduced by more than 17%. Nonetheless, it was reported that the prime minister still earned a gross annual salary of about $1.03 million before the variable component was taken into account.[62]

In April 2007, the Prime Minister's annual salary increased to S$3.1 million (US$2.05 million), about five times that of the thenPresident of the United States George W. Bush who earned US$400,000.[63] The annual entry-level salary for ministers increased from $1.2 million to $1.6 million, and was projected to rise to 88% of the private sector benchmark by the end of 2008. Almost half of ministers' pay packages was made up of an individual performance bonus decided by the Prime Minister, and a variable bonus component based on the country's prevailing gross domestic product and capped at eight months of each minister's annual salary.[64] The pay increases were justified by the Government on the grounds that the salaries had to keep pace with those in the private sector to attract the best talent and to avoid corruption. Teo Chee Hean, the Minister for Defence and minister in charge of the civil service, was reported as saying: "We don't want pay to be the reason for people to join [the government]. But we also don't want pay to be the reason for them not to join us, or to leave after joining us."[63] The increases sparked much debate both in and out of Parliament, with many people seeing ministerial pay as already being too high.[63] During a Parliamentary debate on the issue, Nominated Member of Parliament Thio Li-ann said: "It would be a sad indictment of my generation if no one came forward to serve without excessive monetary inducement, as to be bereft of deep convictions is to be impoverished indeed."[65] On 11 April 2007, the Prime Minister Lee Hsien Loongtold Parliament: "To make it quite clear why I am doing this, and also to give me the moral standing to defend this policy with Singaporeans, I will hold my own salary at the present level for five years. The government will pay me my full salary, because that is the way the system will have to work, but for five years, whatever the increase in the salary above its present level, I will donate to suitable good causes."[66] The following day, it was clarified that the Prime Minister had decided to do so a while ago, and that he had not been influenced by pressure arising from the announcement of the ministerial pay rise.[67]

In view of the worsening economic crisis in 2008–2009, as of January 2009 the Prime Minister's salary was cut to $3.04 million, while the pay of ministerial-grade officers was reduced by 18% to $1.57 million.[68]

Persons who have reached the age of 50 years and retired as MPs and who have served in this capacity for not less than nine years may be granted a pension for the rest of their lives. The annual amount payable is 1/30 of the person's highest annual salary for every completed year of service and 1/360 for every uncompleted year, up to a ceiling of two-thirds of the Member's annual salary.[69] In addition, a retired MP who is at least 50 years old and has for not less than eight years held the office of Prime Minister, Deputy Prime Minister, Senior Minister or Minister[70] may receive an additional pension each year of 1/27 of his or her highest annual salary for each completed year of service and 1/324 for each uncompleted year, subject again to a ceiling of two-thirds of the office-holder's annual salary.[71] Members who have reached the age of 55 years and have served not less than eight years as Ministers may be granted a pension even if they have not yet ceased to hold office.[72] No person has an absolute right to compensation for past services or to any pension or gratuity, and the President may reduce or withhold pensions and gratuities upon an MP's conviction for corruption.[73]

wj168 wrote:

WOW.. I didn't know that MP got pension on top of pension on top of pension too!!?

This is really excessive compensation..

The whole purpose of pension in the early years of Civil Service was to compensate adequately the civil servants who were receiving lower than public market rate.

However, with the introductino of pegging civil service pay to market rate, this pension scheme is no longer applicable. As evident by the dropping of pension scheme for junior civil servants in Singapore. So, Why is the pension system still in place for MPs?