16 Feb 2009

Tonga Finance Minister defends new arrangement for Ministers' pension

4:39 pm on 16 February 2009

Tonga's Finance Minister Afu'alo Matoto has defended the withdrawal of civil service retirement fund money by government ministers following criticism by the Public Service Association.

The PSA says that as well as prematurely drawing their pensions from the fund while other civil servants aren't allowed to, ministers have also been granted extravagant payrises of up to 160 percent.

However Mr Matoto says there has been no increase in ministers' salary, just an amalgamation of the three components of their remuneration into one salary.

And he says the withdrawal of the pensions came after the Privy Council decided ministers were no longer civil servants, and approved a new a non-contributory pension scheme for cabinet members:

"As a result of this non-contributory pension for ministers, they then had to draw their benefits from the retirement fund. And what they draw from the retirement fund was only their contribution. (The) government contribution was left in the retirement fund."