Senate Approves Formula for Retired Prime Minister’s Pension

Amendment to the Pensions (Prime Minister) Act, to allow for changes to the formula by which a retired Prime Minister receives pension, was passed in the Senate on February 29.
Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Dwight Nelson, explained during a sitting of the Senate on February 22, that under the existing Act, a Prime Minister, on ceasing to hold that office and who is no longer a legislator, is eligible to receive pension equivalent to the current salary pertaining to that office.
However, under the proposed amendments, he said, a person who ceases to be Prime Minister at any time after September 11, 2007, will receive a pension equivalent to two thirds of the annual salary appertaining to the current office of Prime Minister, instead of an equivalent salary.
The entitlement of persons, who have held the office of Prime Minister prior to September 11, 2007 and who have ceased to be legislators, should not be affected.
Other amendments include a provision to allow surviving spouses and dependents of former Prime Ministers, who are currently receiving benefits, to continue receiving such benefits, and also a requirement for the current holder of the office of the Prime Minister to elect to receive either the current pension entitlement or the proposed pension entitlement.
When the debate continued on February 29, Leader of Opposition Business in the Senate, Senator A.J. Nicholson, suggested that the Government Senators should withdraw the Bill and add it to the matter of Parliamentary salaries, which is to be discussed at the bipartisan Vale Royal talks.
“Let us discuss it, place it in the Vale Royal talks, so that we have a consensual approach and you have an agreement which everybody agrees on,” Senator Nicholson said.
However, Senator Nelson said that even though dialogue is fundamental and valuable to consensus and hence effective governance, “our disagreements with the decision to equate the pension of the Prime Minister to the salary of the Prime Minister’s office, our disagreement is so fundamental, our conviction that this is wrong is so deep rooted, that we are not going to accept the request.”
The Bill was passed in the House of Representatives on February 12.