Wednesday 28 March 2012

Ministers and office-holders to get 2011 National Bonus of 1.6 months

The Straits Times, 27 Mar 2012

MINISTERS and other political appointment holders will be paid a National Bonus this month equivalent to 1.6 months' pay, the Public Service Division (PSD) said in a statement yesterday.

The National Bonus is a new bonus that provides a direct link between salaries of political appointment holders and the socio-economic progress of average and lower-income Singaporeans, and economic growth. It came about after Parliament endorsed the White Paper on 'Salaries for a Capable and Committed Government' in January.

Based on the approved formula, the 2011 National Bonus is 2.625 months.



But since the new salaries took effect on May 21 last year, when the present Cabinet was appointed, the pro-rated amount will be 1.618 months' pay.


All political appointment holders, from parliamentary secretary to deputy prime minister, will get the same National Bonus rate to reflect their joint contributions as part of the Cabinet, the PSD said. The Prime Minister will get twice the rate as he does not receive a performance bonus.

The National Bonus is based on four indicators: real median income growth for citizens, real income growth for the lowest 20th percentile of citizens, unemployment rate of citizens and real gross domestic product (GDP) growth.

Each indicator accounts for 25 per cent of the payout, which ranges from zero to six months.


Political appointment holders will receive three months of National Bonus if targets for the four indicators are met.

The target for real median income growth for citizens and real income growth of the lowest 20th percentile of citizens is between 2 per cent and 3 per cent. The target for real GDP growth is between 3 per cent and 5 per cent, while the target unemployment rate for citizens is that it not exceed 4.5 per cent.

Last year, Singapore achieved real median income growth for citizens of -0.6 per cent, real income growth for the lowest 20th percentile of 1.8 per cent, an unemployment rate for citizens of 3 per cent and real GDP growth of 4.9 per cent.

The annual salary of political appointment holders has two components: fixed and variable.

The fixed component is equivalent to 13 months of the appointment holder's monthly salary.

The variable component includes the Annual Variable Component (AVC), performance bonus and National Bonus.

The total AVC paid for 2011 is 1.25 months plus $250.

The performance bonus is decided by the Prime Minister and ranges from zero to six months, with a good performer getting three months.

Under the old formula for ministers' pay, political appointment holders were paid a GDP bonus rather than a National Bonus. From 2007 to May last year, they were eligible for a GDP bonus of three months if the economy grew by 5 per cent. GDP growth last year was 4.9 per cent.

After the general election last May, Prime Minister Lee Hsien Loong appointed a committee to review ministerial salaries.

It recommended significant cuts to ministers' annual salaries, changes to the way bonus payouts are decided and the removal of pensions.


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