PENSIONS (AMENDMENT) BILL

Order for Second Reading read.

7.32 p.m.

Dr Goh Keng Swee: Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

This Bill seeks to amend the Pensions Ordinance, 1956, to provide for the pensions and other retirement benefits of persons transferred to the service of the Government from the City Council, the Singapore Improvement Trust and the Tan Tock Seng's Hospital.

The superannuation schemes to which they belonged prior to the transfer generally allowed them to continue membership in their respective schemes. They could also count on their service before transfer as service reckonable for pension on their eventual retirement. As matters stand, such a person would be eligible on his retirement to benefits on his own superannuation scheme as well as retirement benefits under the Government Pensions Scheme. This is clearly contrary to the principle of superannuation. It is, therefore, necessary for provision to be made to enable employees transferred from the City Council, the Trust and the Tan Tock Seng's Hospital to choose to receive benefits either from their own previous superannuation schemes or those under the Government pensions scheme.

There is also the aspect of death benefits. The Government pensions scheme requires payment of at least one year's salary in the form of a death gratuity to dependants of a deceased officer. On their transfer to the service of the Government, employees of the City Council, the Trust and the Tan Tock Seng's Hospital become Government officers, and their dependants would be entitled to a death gratuity of one year's salary should they die in harness. The existing provisions for the payment of a death gratuity do not take into consideration death benefits to which a transferred person may be eligible under his own superannuation scheme. If this situation is allowed to continue, then transferred persons would be better off than Government servants who only have the pensions scheme to rely on for benefits. For this reason, provision Ms been made in the Bill for the quantum of death gratuity payable under the Government pensions scheme to be reduced to the extent of contributions paid to the superannuation scheme to which a transferred person belonged by his previous employ in Government.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole Assembly.

Assembly immediately resolved itself into a Committee on the Bill. -[Dr Goh Keng Swee].

Bill considered in Committee.

[Mr Speaker in the Chair]

7.35 p.m.

The Chairman: There are four clauses - clauses 1 to 4. Which clause does the Member for Mountbatten wish to speak on? Clause 2?

Mrs Seow Peck Leng indicated assent.

Clause 1 ordered to stand part of the Bill.

Clause 2 -

Question proposed, "That clause 2 stand part of the Bill."

Mrs Seow Peck Leng: Mr Speaker, Sir, as I have said, this is merely to point out an anomaly which will exist. This clause requires an officer to pay Government's share of whatever Government has paid into the Central Provident Fund before he gets his gratuity and pension. What I want to point out is this. Especially in the case of women, this would affect them more, because women retire at an earlier age. Now, Miss A and Miss B are working. Miss B has been in Government service for 20 years. Miss A has been in the City Council or a similar organisation for 20 years and has been paying to a certain fund, the C.P.F. or whatever retiring benefits fund it is. This would also apply to women in regard to the transition into the equal pay scheme. That is why I felt that this phrase here is so broad that it is necessary to bring it up. In that case, the one who has done 20 years' service where she has paid towards another fund, but not the pensionable one and has become pensionable in the last 10 years of the service, when she retires, she will have to pay back Government's share of that fund, let us say, for argument's sake, the C.P.F. If she has contributed $20,000, Government has contributed $20,000 and when she retires she has to make good Government's $20,000 before she can become pensionable, before she can get her gratuity and her pension. The $40,000 is frozen until she is 55. She can draw it. Not only is her own $20,000 which has been paid frozen until she is 55, but Out of her gratuity that she gets, she has to pay Government's share of $20,000 and freeze that money if she retires at 45. She has the double sum of money frozen till she is 55. That is why I felt that since this clause of having to pay back the Government's share before one can become pensionable or draw a gratuity will affect not only this but also other schemes where there is a transition from a temporary or from a gratuity scheme to a pensionable scheme, I thought I would draw Government's attention to the anomaly that will be discriminating against those people entering the pensionable scheme at a later stage of their service.

Dr Goh Keng Swee: I think the Member for Mountbatten was really raising a point connected with equal pay for women. So far as these persons are concerned, they have their choice. If they think opting into Government scheme is disadvantageous, they stay on the previous scheme.

I think I have got the point, which is this. Let us say, we take Miss A. Because she is married or for other reasons, she has been contributing to the Central Provident Fund, say for 10 years. Then the benevolent P.A.P. Government comes in and introduces equal pay. So she goes on to the permanent establishment and qualifies for pension. Then the Member for Mountbatten says when she retires, the Government's contribution for these 10 years has got to be refunded to the Government. I mean that is fair enough because we are giving her, in this instance, credit for 10 years' service in the Government. If she does not want to refund to the Government, she can, but she will lose 10 years' service. On a simple calculation, the gain to the officer will be so tremendous that I cannot imagine anyone not agreeing to this proposal to opt fully into the Government Pensions Scheme. Apparently the Member for Mountbatten thinks that I misunderstood her. If so, I am willing to give her a hearing.

Mrs Seow Peck Leng: No, Mr Speaker, it does not apply to equal pay alone. In this too, as the Minister has said, the officer has the option. He can choose. But it is Hobson's choice. They want the pension because it is a better scheme. I am not talking about paying back. Yes, they do not want Government's share and their share and the pension. Nobody would expect that. But the fact that if she has to pay back Government's share into the C.P.F. - she does not draw it. She has to wait till 10 years or whatever it is, until she reaches the age of 55, before she can draw it. And if she retires at 45, she has to wait for ten years to get her previous contribution plus Government's contribution, which she has to refund. Instead of getting her own money back when she retires, she has to add on to what she has already paid another sum equivalent to what she has already paid on retirement. So instead of getting money on her retirement she pays out money on her retirement!

Dr Goh Keng Swee: Sir, I am advised by my colleague, the Minister for Health and Law, that where a woman officer retires at the age of 45, the Central Provident Fund will be willing to pay the accumulated contribution. That is what I have been advised.

Mrs Seow Peck Leng: Sir, if this is a new regulation, I do not know. But I can assure the Minister that when I retired I was faced with that difficulty. So I felt that no women in future who retire should be faced with the same difficulty. I was lucky enough that after two years or after so many years, I applied to say that there was no likelihood of my going hack to work, and they did give me special concession. But in ordinary cases a woman will have to wait till 55 years.

Question put, and agreed to.

Clause 2 ordered to stand part of the Bill.

Clauses 3 and 4 ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.