I also attach a copy of the Parliamentary Act so you know I am not making this up.
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Some people actually think our ministers only make $40,000 a month, hence are not bothered by our ministers' pay. Some people think it's okay for our ministers to quibble over $30 increase in subsidies to the poor!!
DO MINISTERS RECEIVE 50% OF THEIR LAST-DRAWN PAY FOR LIFE?
Your friend is wrong about 50%. It is actually as high as 2/3rds. The Parliamentary Pensions Act provides that "office holders" (which means "Prime Minister, Deputy Prime Minister, Speaker, Senior Minister, Minister, Senior Minister of State, Minister of State, Mayor, Senior Parliamentary Secretary, Parliamentary Secretary or Political Secretary"). If you closed your eyes and threw a stone in Parliament House during a Parliamentary sitting - assuming if, and it is a big if, that everyone attends (which is never the case. Parliamentary sittings are lucky if 50% of MPs attend!) you will hit at least 1 or perhaps 2 with the stone ricocheting PAP chaps entitled to pensions.
Anyhow, back to your question. The Act has a formula for payment of the amount of pension. You start with a numerator of 8 (meaning 8 years of service as office holder) and add 1 for every year of service after that. You divide this number by a fixed denominator of 27, and you stop when the number hits 2/3rds, which means that anyone who has 18 years service will hit maximum pension. The amount that is due to him FOR LIFE is found at section 4:
4(2) The annual amount of pension payable to an office-holding Member shall be —
(a) in respect of every completed year of reckonable service in any office, or where he has served in
more than one office in each office, at the rate of one-twenty-seventh (1/27) of his annual salary in that
(b) in respect of any remaining uncompleted year of reckonable service in any office, or where he has
served in more than one office in each office, at the rate of one-three-hundred and twenty-fourth (1/324)
part of his annual salary for each completed month of reckonable service in that office.
(2A) The annual pension payable to any office-holding Member under subsection (2) shall not exceed two-thirds
of the highest annual salary of any office held by him.
(3) Subject to sections 13 and 15, a pension granted under this section shall continue for the life of the person to
whom it is payable but shall not be payable in respect of any period during which he is again an office-holding
Member; at the end of that period the pension shall again be payable and shall be re-computed with the addition
of that period to the period of his former reckonable service as an office-holding Member.
(4) For the purposes of subsections (2) and (2A), “annual salary”, in relation to any office, means the annual
equivalent of the highest monthly rate of salary (excluding any non-pensionable allowances) received by an
office-holding Member during any period of reckonable service as a holder of that office.
Astonishing, isn't it that the pension is payable based on the "Highest annual salary of any office held by him" and "highest monthly rate of salary". So, it doesn't matter that the MP was a low ranking parliamentary secretary for 17 years, and then became a multi-million $ minister for 1 year. His pension will be based on 2/3rds of his salary as a minister, as that is his highest annual salary of any office held by him. So, it also doesn't matter that there are occasional reductions in salary during recessions, since their pension is based on their highest annual salary.
On this basis, SM / PM / MM will get 2/3rd x $3 million for the rest of their lives. I understand that if they are eligible for pension and they are still serving, they get both salary plus pension concurrently. (see section 5).
Or did I forget to tell you that pensions are exempt from income tax? This is stated in the Income Tax Act!
It gets better. The Act says that the pension can be commutated. This means that it is paid in 1 lump sum instead of monthly payments for life. The lump sum is equivalent to 175.14 months of pension, i.e. 14.6 years of pension. It doesn't matter that the minister asks for it because he has terminal cancer and has 3 months to live. He will get 14.6 years of pension paid to him in 1 go, and it will be tax free. If MM's pension is based on 2.5 million (conservative estimate), his commutated pension is $36.5 million. Can buy a GCB with it, without any bank loan!
This is a real scandal. I was horrified when Goh Chok Tong proposed recently that ministers serve 8 years only, and new ones come in. It means that the pool of multi-million dollar pension earners will get bigger and bigger! It will add to the financial burden of future generations of Singaporeans having to pay for the pensions of people who have already been paid too much during their terms of office.
Who in the private sector is entitled to pension? And yet the ministers, etc are collecting tax free pensions on top of their world's highest salaries. Now you know why George Yeo is fighting so hard to keep his job as minister.
Incidentally, all Admin Service officers, Sr Police & Military Officers and High Court Judges are still entitled to pensions in the same manner.