Sunday, May 15, 2011


Ministers collect pensions at age 55 even in office – DPM Teo
In a desperate attempt to explain the PAP’s pension scheme for its retired ministers which has been making waves in cyberspace, DPM Teo Chee Hean unwittingly revealed the shocking fact that PAP ministers start collect their multi-million dollar pension at the age of 55, even if they still remain in office.

Under the Parliamentary Pensions Act (PPA), political office-holders ranging from parliamentary secretaries to the Prime Minister, including the Speaker of Parliament, are eligible to receive pensions from the state, as long as they have served for a minimum of eight years and are at least aged 50 when they step down.

For every completed year of service, the annual pension amount is raised by 1/27 of the ‘pensionable component’ of his salary. The final ratio, however, must not exceed two-thirds. This means that after 18 years of service, the final ratio used to compute a minister’s pension stops increasing, the Straits Times reported.

Before 1982, office-holders had to step down before they could begin receiving pensions. However, for some strange reasons, it was amended that year to allow office-holders to begin collecting at 55, even if they were still holding office.

This means that there are at least 7 PAP ministers who are still receiving pensions from the state on top of their annual multi-million dollar pay package – MM Lee Kuan Yew, SM Goh Chok Tong, PM Lee Hsien Loong, DPM Wong Kan Seng, Minister in PMO Lim Swee Say and DPM Teo Chee Hean himself.

Former Foreign Minister George Yeo, who is 57 year old this year, has been receiving pension for the last 2 years and for the rest of his life.

The state pension scheme applies only to PAP ministers and senior office-holders and has long been scrapped for the ordinary rank-and-file civil servants.
DPM Teo dispels ‘seven-digit’ pension rumours
By Alicia Wong

DPM Teo Chee Hean explains why the PMO has decided to clarify pension rumours. (Yahoo! Photo/ Faris Mokhtar).

The Prime Minister's Office has dispelled rumours of seven-figured pension payouts paid to retired ministers annually.

In a letter to the mainstream media on Friday, the PMO said that retired ministers who serve 18 years or more receive a maximum annual pension payout of about one-tenth of their annual salary.

According to the Public Service Division figures for 2009, an entry-grade minister received an annual salary of $1.57 million while a Prime Minister's salary was $3.04 million.

On Friday, Deputy Prime Minister Teo Chee Hean told The Straits Times the PMO saw the need to clarify the situation because of "misinformation" that has been circulating on the Internet after the General Election.

Rumours being spread online said Foreign Minister George Yeo would continue to receive a seven-digit pension sum every year, even after stepping down as a Minister.
DPM Teo said, "I'm not surprised that it (the misinformation) causes some consternation. So it's best to just state what the actual position is and the actual position is quite different from the misinformation that has been going around."
To qualify for a pension, ministers have to serve at least eight years as a political office-holder and be at least 50 when they step down.

Their 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.

A minister qualifies for the maximum pension of two-thirds of this pensionable component of his monthly salary after having served as an office-holder for 18 years. The pension is less if he has served for a shorter period.

The letter said Members of Parliament elected after January 1995 are not eligible for MP pensions, but ministers appointed after 1995 are eligible for ministerial pensions.

Civil servants from the elite Administrative Service and intelligence service officers also receive pensions after a certain number of years in service.
Explained DPM Teo, "There's a very specific reason for a small group of officers to still be on pensions because there is a premium in this case for long-term service in order to provide consistency of policy and implementation.

"But in any case, the value of the pension is fully taken into account as part of a minister's total pay package when we make comparisons with the private sector benchmarks."

The PMO also revealed that the Parliamentary Pensions Act, amended in 1982, for an eligible office-holder to receive a pension at 55 while he holds office is being reviewed.

DPM Teo said, "We are looking at that again because employment and re-employment terms have been changing over the years."

"The retirement and re-employment situation has been under review for quite some time and there have been some changes in the practice, so we want to make sure that this is appropriate still."


  1. This is the reason why we need to have alternative voice in Parliament.......Absolute power corrupts absolutely.

  2. They should start declaring all those things that they have not told us yet, before the WP dig them out.

  3. Did Mr Chiam receive his pensions??