Published January 20, 2009

Senior civil service pay cut could top 20%

Salary adjustments linked to economy's performance

By CHUANG PECK MING

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ALREADY tipped to fall as much as 20 per cent in 2009, the salaries of ministers and senior civil servants - heavily tied to Singapore's gross domestic product - could drop even further if the economy crumbles.

'As the salaries are linked to economic performance, the 2009 salaries may be subject to further adjustments, given the volatility of the economy,' Defence Minister Teo Chee Hean told Parliament yesterday.

Mr Teo, who is also Minister-in-Charge of the Civil Service, said Ministerial grade, or Staff Grade I (MR4), salaries are now projected to fall 20 per cent from 2008 to $1.54 million this year. The entry Superscale grade (SR9) salary will go down 12 per cent to $351,000.

These projected cuts are downward adjustments from those announced in November last year, when the government said salaries of ministers and senior civil servants would drop by as much as 19 per cent. Those at MR4 grade were to fall 18 per cent to $1.57 million and those at SR9 were to go down 12 per cent to $353,000.

At that time, the government had expected the economy to grow 2 per cent or contract one per cent this year. But about three weeks ago, in early January this year, the growth forecast was cut to minus 2 per cent to plus one per cent.

Last Friday, Prime Minister Lee Hsien Loong said the government is adjusting its growth forecast further as things are deteriorating on the economic front.

The 'norm' total annual pay of political appointment holders and civil servants whose salaries are pegged to the MR4 benchmark was $1.92 million in 2008, according to Mr Teo. This includes individual performance bonuses and all other bonuses.

The norm total remuneration for those pegged to the SR9 benchmark was $398,000.

The individual performance bonus for an officer in the MR4 grade can range from 0 to 14 months. Mr Teo said a performance bonus of nine months was used to compute the 2008 norm salary package (of $1.92 million) for a typical officer on MR4.

The actual bonus given varied with the officer's performance. And this ranged from six to 10 months in 2008, with an average payout of 8.33 months or $455,000.

For SR9, the individual performance bonus can range from 0 to 8.5 months, with 4.5 months used to compute the 2008 norm salary for a typical officer. The actual performance bonus for the year ranged from 0 to 6.5 months, with an average payout of 4.82 months or $86,000.