MPs are special but they should still convert from pension to EPF

 

From Lee Hwok Aun

Are MPs special?

That question was posed to a panel of MPs and academics at a recent closed-door forum. The enquirer, a former civil servant, proceeded to challenge Parliament for exempting MPs from the pension reform proposed for the civil service, which will replace pension with EPF savings for new public service recruits.

Future MPs, however, will retain their pension benefits, including the generous condition that a mere three years of service entitles MPs to lifelong pension, payable from age 50. They qualify for the maximum pension, equivalent to half the last drawn salary, after another three years.

Civil servants must work for 30 years to qualify for the maximum pension (60% of last drawn salary).

The two young MPs on the panel declined to say there was something special about their status, but they declared a willingness for EPF savings instead of pension.

They also said removing pensions was stiffly resisted by senior MPs, and putting future MPs on EPF savings instead of pension would be a hard sell. Alas, reform looks unthinkable.

Parliament is rightfully facing scrutiny for not undertaking the same change it is imposing on the civil service. Morally, they should walk the talk.

Yet, there are real constraints, and the problem is less about the hypocrisy of Parliament and more about the neglect of workable solutions.

Nevertheless, there is an alternative and it begins with an affirmative answer to the provoking question.

The truth is MPs are special.

Let’s consider three factors that complicate Parliament’s ability to undertake a reform parallel to the civil service.

Firstly, the manner of their appointment – including the uncertainty of their tenure – sets them apart from any employee.

MPs are elected by the rakyat, not recruited by managers. MPs do not enjoy permanent employment, nor even fixed-term contracts.

Ideally, MPs work for five years in one go, but the term may be cut short for political reasons. Whether they stand again depends on their party.

This is one reason parliamentarians only need to serve three years to get their pension and that they should not be deprived of it by whims and factors beyond their control.

This generous condition is also difficult to deny to newly elected MPs, while giving it to re-elected MPs. If such a policy is implemented, the resulting disparity in benefits could be detrimental to morale.

Pension reform for parliamentarians is decidedly a case of all or nothing: either all MPs convert to EPF savings or none do.

A second factor enters the fray – parity among parliamentarians. MPs’ responsibilities are the same, although they may be ranked by additional roles in the Cabinet or on committees.

All MPs, whether in the first or 30th year of service, are paid the same salary (officially termed 

allowance

).

In contrast, entrants to the civil service generally start in lower-ranked positions and have the chance to be confirmed and permanently employed, then work their way up. It is acceptable for new recruits to be placed on EPF savings even while their seniors keep the pension plan.

Parliamentarian parity reinforces the difficulty of taking the civil service approach. Rookie MPs will find it unacceptable to be placed on EPF savings while their returning peers enjoy vastly greater benefits, despite all swearing the same oath of office.

Third, the nature of work and the weight of responsibility of parliamentarians differentiate them from civil servants. They are at the forefront of the legislative branch.

They are called 

Yang Berhormat

 because of the honour and importance bestowed on their position and the dignity and diligence expected of their conduct. They are public figures who are expected to lead by example.

The value of parliamentarians’ work should be reflected in the reward. MPs are paid well and they enjoy handsome travel, accommodation and communication allowances, as stipulated in the Members of Parliament (Remuneration) Act 1980.

Prime Minister Anwar Ibrahim has proposed a stop to the practice of receiving multiple pensions for those who have held multiple federal Cabinet or state executive council posts.

A more durable policy would be to raise salaries and drop pensions, adopting EPF savings en masse, and solidarity with society by relieving taxpayers from the burden of future pension payments.

MPs currently on track for pension cannot be hung out to dry. They could be granted fair and commensurate lump sum payments – possibly into EPF accounts, as a one-off special measure – equivalent to what they would have accumulated.

Malaysians find it jarring that parliamentarians get to keep their generous pension at taxpayers’ expense, while phasing out the civil service pension.

Will the present MPs find the clarity and courage to live up to their special status? _ FMT

Lee Hwok Aun is a senior fellow at the ISEAS-Yusof Ishak Institute.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.