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.
