Rafizi puzzled by RM2.28b addition for pension expenditure

PKR vice-president Rafizi Ramli has questioned why the government is seeking a RM2.28 billion addition to cover its expenses on pensions and benefits.

In addition to the RM3.3 billion supplementary supply bill the government tabled yesterday, the government also made a request for RM2.29 billion for fixed expenses and RM391 million for development expenditures.

Of the RM2.29 bilion for fixed expenses, RM2.28 billion was earmarked for pensions, allowances and benefits.

Rafizi said this was odd, as it should not have been necessary unless the Retirement Fund Inc (KWAP) is in financial trouble.

"The federal government would only need to inject new funds if the financial position of KWAP is deemed to be insufficient to pay for the pensions of government officers in the future," the Pandan MP told a press conference in the Parliament lobby today.

Rafizi said based on his observation of the KWAP's Financial Year 2014 report, the fund had performed worse than in previous years.

As such he said, due to the bad investment environment in 2015, he expected KWAP to have done worse last year.

"At the same time, KWAP had been linked to the 1MDB controversy, including the RM4 billion loan to SRC International," he said.

He said he would write to KWAP to get more detailed reports so he can properly analyse their financial situation.

In October last year, SRC International, a former 1MDB subsidiary, said the entire RM4 billion loaned to KWAP on normal commercial terms is fullyaccounted for in its balance sheet, in accordance with standard accounting and governance practices.

Meanwhile Rafizi also expressed concern over the RM240 additional allocation for the State Reserve Fund.

"This shows that the financial positions of some state governments are weak and wholly dependent on funds from the federal government."

He feared that such dependency, may drive some states to bankruptcy. -Mkini