Published March 21, 2009

Civil servants to get pay cut

By TEH SHI NING

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THE Public Service Division (PSD) yesterday confirmed that civil servants will see a pay cut this year, given the slowdown in Singapore's economy. But last year's performance bonuses will still be paid out this month.

Civil servants' annual salaries will first be reduced via pay components linked to economic performance. These include the GDP Bonus paid to senior civil servants, and the Annual Variable Component (AVC), usually paid out to civil servants in the middle and at the end of the year.

'The drop is to be expected as it is consistent with our salary policy which pegs the annual pay of civil servants to pay levels in the private sector,' said Ong Toon Hui, PSD director (Leadership Development).

No GDP bonus will be paid this year, and 2009's AVC is also expected to be lower, or possibly even zero, the PSD said. However, performance bonuses, which are paid out in March for work done last year, will still be awarded based on individual merit.

Civil servants were told to expect the salary drop in a staff circular dated March 16, and the civil service unions have also been informed.

The PSD said that the civil service will adhere to the National Wages Council's guidelines in deciding salary adjustments for 2009, and consult the unions after the council issues its recommendations. Therefore, the exact extent of pay cuts cannot be revealed before then.

Ms Ong said: 'If economic conditions continue to deteriorate, further adjustments in salaries will likely be necessary.'

The PSD added that statutory boards have been informed of the expected drop in civil service pay, but as autonomous agencies are not required to follow the civil service's pay adjustments.