Pension about a tenth of minister’s pay

I refer to the 14 Mar 2011 Straits Times report of Mr Teo Chee Hean’s attempt at explaining minister pensions.

After explaining so much, we are still not told how much exactly is Mr George Yeo getting.

Let’s try to calculate for ourselves. Mr Yeo’s political career started in 1988. So he has served at least 8 years and is also more than 55 years old now so he is entitled to ministerial pension. He has completed 22 years of service excluding this year. His pension ratio should therefore be 22/27 but since there is a cap of 18/27, he will receive the maximum pension ratio of 18/27 or 2/3.

Let’s say Mr Yeo’s last drawn annual package is a conservative $1.5 million of which roughly half is pensionable according to a PSD statement in 2007 (quoted from the same Straits Times article).

So Mr Yeo’s pension would be $1.5 million * 1/2 * 2/3 = $0.5 million.

The calculated figure is one third, not one tenth of minster’s pay as Mr Teo would like us to believe. So which is more believable? Mr Teo’s clarification or the supposed misinformation that he claims to be circulating on the Internet?

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