Whither the Ministers’ Pension

The ministers finally decided to have their pay cut. It was a good run for them since the 1990s and too bad for the new ministers like Heng Swee Kiat and Chan Chun Sing who joined the special club of million dollar salaried politicians. They took a substantial pay cut in absolute terms. For example, PM Lee Hsien Loong took a pay cut of about $800,000 to settle at about $2,200,000 annually with the various bonuses packed in when the economy is performing sweetly.

Still, the PM earned more than $2 million and this is a substantial amount to the heartlander who most probably cannot amass $2 million in their lifetime let alone in a year. This is an emotive argument that is hard to dispute and the PAP ministers cannot easily beat that kind of spin by its detractors.

However, what many people missed the forest for the trees is that ministers’ mysterious complex formula for its pensions are also to be replaced with the transparent CPF contribution scheme. This is the real essence of the ministers’ pay cut in the long term, not a pay revision per se however impressive or weak it is to the PAP fan or critic.

It is one thing to pay someone in his office, but it is another thing altogether if they are continued to be paid after they left office and retired. With that broad stroke of taking away the pension, it is by itself the saving grace of the entire recommendations of the review committee. More on that later.