Article courtesy of FMT with thanks.
PETALING JAYA:
Prime Minister Anwar Ibrahim had in early 2024 announced
that civil servants would receive salary increments under a new
remuneration system for them. The salary increments between 7% and 15%
will also cause an increase in pensions for government pensioners.
However, misinformation regarding the
SSPA salary scheme has led to confusion among the estimated 930,000
pensioners from the civil service, judges, former servicemen and
senators.
FMT takes a deeper look into the pension issue.
How it started
Twelve years ago, Najib Razak’s
government introduced the Pension Adjustment (Amendment) Act 2013; among
the tweaks made to the law, was a clause to introduce a fixed 2% annual
increment on all pensions from January 2013.
This amendment prevented pensions from being revised each time new salary schemes are introduced once every five years or so.
This effectively meant that a teacher who
retired in 2012 on Grade DG 48 with 30 years of service would draw a
pension based on his last drawn basic at that time.
Today, that penson is at least 30% lower than what someone on the same grade with the same length of service gets.
Several groups comprising current and
former civil servants have cited the above examples when arguing that
the amended Act violated Article 147 of the Federal Constitution. The
said Article states that pensions should be recalculated to reflect the
current last drawn salary on the same grade and scale.
Aminah Ahmad and 56 pensioners
Unhappy with the anomaly created by the
amendments, two groups of civil servants, two groups of ex-servicemen, a
judge and two senators went separately to the courts to get the amended
law declared illegal.
Former Wisma Putra officer Aminah Ahmad
led a group of 56 retired civil servants to sue the government. She lost
at the High Court but won at the Court of Appeal and also when the
government appealed to the Federal Court.
The apex court ruled that for those who
retired before 2013, the payout is reverted to the December 2012 amount.
And that the pensions be recalculated to correspond with new salary
structures each time there is a revision.
However, the court did not make any order
for retrospective adjustments to be made to pensions and for any
arrears to be paid to them from 2013 on the ground that Aminah did not
prove she suffered any actual loss. As such, the Federal Court said the
decision was only to take effect from the date of the application which
was in January 2022.
No more 2% annual increment
The apex court also upheld that the 2%
annual increment from 2013 was unlawful and had to be stopped. However,
as a gesture of appreciation, the government continued to pay out the
accumulated 2% increment, which is termed as a special incentive
allowance for pensioners, as a fixed sum permanently.
It must be noted that although there
won’t be any more annual increments on pensions, these accumulated sums
will be included as part of the pensions monthly. However, there was no
announcement as to whether this will be a permanent arrangement.
As for the pensions under the SSPA
introduced on Dec 1, the rates were revised based on the current
equivalent of basic salaries in the grades they retired on.
Action to seek arrears
When the government refused to pay the
revised pensions and arrears from 2022, Aminah’s lawyers wrote to the
Public Service Department reminding them to implement the Federal Court
order and pay the arrears from the date mentioned.
In its reply, the government said that
the 2013 amendments were not considered a salary revision, but an
improvement in the structure of wages, which may not apply to
pensioners.
Aminah’s group then applied for a writ of
mandamus from a Kuala Lumpur High Court to implement the decision to
pay them post-2013 pension adjustment arrears effective from January
2022. The decision will be announced on Jan 16.
Pensions for ex-servicemen
Similarly two groups of former servicemen
have filed suits against the government asking for the pensions to be
revised using the existing salary scale and structures.
The groups argued that the government has
violated Article 137 and/or Article 8 of the Federal Constitution read
together with the Armed Forces Act 1972 which accords the right to
military pensioners to receive pensions based on the revised basic
salaries.
The groups also cited Article 147 which they say overrides any other law on this.
In the first case, a High Court allowed
the originating summons filed by 50 retired armed forces personnel
against the government, the Malaysian Armed Forces Council and two other
parties regarding pension adjustments for those who retired before Jan
1, 2013.
It ruled that the pensioners who retired
before this date, have the right under the Federal Constitution to have
their pensions adjusted according to the rates and methods set for all
military retirees who left after Jan 1, 2013.
The government has appealed this decision and a judgment is expected on Jan 21.
The second group comprising 2,742
veterans filed another similar suit against the government with detailed
calculations of backdated pensions allegedly due to them. The High
Court will deliver its judgment on June 16.
If the plaintiffs eventually win their
cases, the government will be duty-bound to revise the pensions of all
ex-servicemen who retired before Jan 1, 2013 to their current equivalent
wages in the grades they retired on.
Judge and senators win suit
In 2023, the Court of Appeal upheld a
Kota Kinabalu High Court ruling allowing a retired judge to claim a
shortfall in pension payments paid to him between 2015 and 2022
following a salary revision in 2014. The three-man bench dismissed
appeals brought by the government and Public Service Department.
Former judge Ian Chin Hon Chong had
sought to declare the amended Judges’ Remuneration Act 2014 void and
inconsistent with Article 125 (7) of the Federal Constitution.
The Federal Court refused to grant leave to the government to appeal the COA’s decision, making the ruling final.
According to some reports, all affected judges have been paid their revised pensions and arrears in November.
While in January last year, two senators
won their appeal against a High Court decision disallowing them to
receive revised pensions in accordance with the new allowances with
effect from 2015.
The senators, whose pensions were based
on the allowance of RM4,112 when they retired before 2015, were ordered
by the appeals court to be paid pensions based on the revised salaries
for senators which was raised to RM11,000 in 2015.
The court ruled that there must be a
corresponding increase in the pensions of the elected representatives
each time their allowances are revised. The government has appealed and
the decision has been fixed for Jan 13.
