PENSIONS (AMENDMENT) BILL

Order for Second Reading read.

2.54 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Honourable Members will recall that a 13th month salary was paid to civil servants in March this year. In fact, for reasons which I have already stated in this House, a second 13th month salary, which will otherwise be paid in March next year, will be paid in December of this year instead. This payment is intended to be an annual non-pensionable allowance, an allowance which would attract a Central Provident Fund contribution at the revised rate of 12 per cent. At the same time, because of the increase in the CPF rate from 10 per cent to 12 per cent, all pensionable employees in the Government service were required to make a two per cent CPF contribution with effect from April 1972 on their monthly emoluments, with a matching contribution from the Government. These contributions to the CPF are intended as additional benefits `over and above the pension benefits.

As the Pensions Act stands, any period of service during which a Government employee was a member of the Central Provident Fund cannot be reckoned for benefits under the Pensions Act, unless he first pays back to the Government any CPF contributions made by the Government on his behalf. This is a requirement under section 60 (I) of the Act. In view of the changed circumstances since April 1972, when pensionable employees were required to contribute two per cent of their emoluments to the Central Provident Fund in respect of their pensionable service, it is necessary to amend section 6 of the Pensions Act. This amendment will allow a pensionable employee to retain the two per cent CPF contribution paid by Government on his account when he eventually retires from the service.

Section 16 of the Act is also similarly affected, and a consequential amendment is required. This section provides for the payment of a death gratuity when an officer dies in service, or within one year of his retirement. The amending Bill, when passed, is to be made retroactive from 1st April, 1972, which is the date on which contributions to the Central Provident Fund were made for pensionable Government employees.

Sir, I beg to move.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill.-[Mr Hon Sui Sen].

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