Top civil servants will have two components of their salary changed on July 1 following a review, but will not have to face the pay cuts that were imposed on ministers' salaries last year.
Announcing the outcome of a comprehensive review on the salary framework of top civil servants in Parliament yesterday, Deputy Prime Minister Teo Chee Hean said the review found current salaries to be at the right level.
"There is no need to raise them or to cut them," he said in response to MP Baey Yam Keng (Tampines GRC), who had asked for an update on the review.
However, two structural changes to the salary will be made.
First, the pension system will be replaced with a long-term retention package for officers in the elite Administrative Service.
No further details were given of the package, but the change is in line with talent retention practices in the private sector and parts of the public sector.
Likewise, judges, the Attorney-General, the Auditor-General and the chairman of the Public Service Commission will have their pension schemes replaced by a gratuity plan.
Both the retention package - to retain officers for leadership and policy continuity - and the gratuity plan are "essentially of the same value" as the pension, Mr Teo said.
Second, their bonus will no longer be based on gross domestic product alone, but will be expanded to include indicators such as the socio-economic progress of middle- and lower-income Singaporeans.
This bonus, called the National Bonus, is the same as the one adopted by those holding political appointments last year.
Mr Teo added that some salary ranges and start points will be adjusted to smoothen out the progression.
He also stressed that the public service will keep paying competitive salaries, but these will lag behind - rather than lead - the market.
The changes are the result of a review by the Public Service Division (PSD) which coincided with the Government's decision in January last year to cut ministers' salaries.
The PSD had engaged Mercer, a global expert on remuneration issues, to conduct the review.
Yesterday, several MPs, including Mr Lim Biow Chuan (Mountbatten) and Ms Denise Phua (Moulmein-Kallang GRC), raised questions about the need for talent retention to go beyond money.
In response, Mr Teo stressed: "The most important motivation for a person to stay in the public service is that he gets happiness out of other people's happiness."
He gave his assurances to Mr Zaqy Mohamad (Chua Chu Kang GRC) that competitive pay did not have to mean these civil servants were disconnected from the ground, as there are avenues for them to stay in touch, like the Our Singapore Conversation and community attachments.
Kelly Services Singapore vice-president Mark Hall said that in replacing pensions with retention packages, the Government is following the course of many private sector firms while still giving staff a financial incentive to stay on.