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No more pensions for Singapore's civil servants

Top civil servants as well as judicial and statutory appointment holders will no longer receive pensions and, like political office holders, their annual Gross Domestic Product Bonus will be replaced by a National Bonus that takes into account, among other things, the socio-economic progress of the middle and lower income.

In the light of these changes, which will take effect on July 1, Administrative Service officers will receive a “long-term retention package” instead of a pension, while a gratuity plan will be introduced for judicial and statutory appointment holders.

Nevertheless, the review - which took place after a similar review resulted in a cut in ministers’ wages — concluded that the current salaries of this group are “at about the right level, and will be maintained”, Deputy Prime Minister Teo Chee Hean said in Parliament. This means that the salaries will not be raised nor cut.

The Public Service Division (PSD) said the replacement of the GDP Bonus with National Bonus would affect about 300 Administrative Service officers, judicial and statutory appointment holders. It added that the removal of pension will affect all new Administrative Service officers.

Mr Teo said he had told the PSD to consider the need to continue having market competitive salaries, so as to recruit and retain persons of high calibre and commitment level. This is in line with the view held by the committee which reviewed political salaries, he pointed out. He said that the PSD then conducted a “comprehensive review”, during which it “maintained the policy that Civil Service salaries should lag, and not lead the market, even though they take reference from the market”.

Nevertheless, there will be “some adjustments to certain salary ranges and start points to smoothen out salary progression”, he said.

Firstly, pensions will be removed, and in its place will be a long-term retention package for the administrative service to retain officers for leadership and policy continuity within the public service. For the judicial and statutory appointment holders, a gratuity plan will be introduced.

Secondly, the Gross Domestic Product Bonus (GDP Bonus) currently received by the officers and appointment holders would be replaced with the National Bonus, similar to that for political appointment holders.

The National Bonus is linked to the socio-economic progress of average and lower-income citizens, and the growth of Singapore.

Mr Teo noted that the long-term retention package and the gratuity plan are “essentially of the same value as pension”. They are also taken into account in the overall salary levels when carrying out wage comparisons, he said. The removal of pension for the statutory appointment holders and the judicial appointment holders will require constitutional amendments. These amendments will be tabled in Parliament in due course, he said.

Deputy Prime Minister told the House that the government will continue to regularly review the salaries of the administrative service and judicial and statutory appointment holders to ensure that they remained competitive. The reviews will not be following any specific formula but will examine and take reference from a number of different sources including market surveys by compensation specialists and salary data from the Inland Revenue Authority of Singapore.