GOVERNMENT PENSIONERS AND PENSIONS

Mr Yeoh Ghim Seng asked the Minister for Finance how many Government pensioners there are in Singapore and whether their pensions are assessed to be sufficient to see them through their daily needs.

The Parliamentary Secretary to the Minister for Finance (Mr S. Ramaswamy) (for the Minister for Finance): Mr Speaker, Sir, the total number of Government pensioners at present is 8,710. Of these, 3,035 are living in Singapore.

The amount which a pensioner will receive on retirement depends on his length of service and his last drawn salary. The maximum which an officer may receive as pension is equal to two-thirds of his last drawn salary. To qualify for this, he will have to complete a length of service of 33 1/3 years. Since most Government officers join the civil service for a career, most officers will, on retirement, have completed a length of service fairly close to the number necessary to qualify for the maximum.

The question of whether such pension is sufficient to see a pensioner through his daily needs can best be assessed by comparing his income and commitments before and after his retirement. A serving officer will have to meet from his salary his personal expenditure, the expenditure of his family, and to have a small saving. After retirement, his personal expenditure should fall. His family expenditure should also fall since some, if not all his children would by then be grown up and be no longer dependent on him. He is not expected to save from his pension. Thus, his expenditure should fall by at least one-third or more. As already explained, his income on retirement will be reduced by about one-third. Since this fall is matched by a corresponding fall in his expenditure, a pensioner is expected to be no worse off than before his retirement.

There are some officers who opt to commute a quarter of their pension for a lump sum payment as gratuity on retirement. In such cases, the amount of pension payable will be reduced by a quarter. The reduced amount payable monthly will then be about half his last drawn salary. This may then be found insufficient. Officers who require a higher monthly income from their pension, therefore, should not opt for a gratuity. The choice is theirs.