Pension payout to civil servants will cost RM1.3bil

 

The difference between the current pension amount and the original pension amount will now be paid in the form of a special assistance called Penghargaan Khas Kepada Pesara.

PUTRAJAYA: The pension payout to retired civil servants as the result of a Federal Court ruling that amendments to a law governing the pension of civil servants were unconstitutional will cost the government RM1.3 billion.

“The financial implication is RM1.3 billion, but this has been taken into account in the Budget. This is not (an) additional (allocation),” Prime Minister Anwar Ibrahim told enforcement agencies during an event here today.

In February, Anwar, who is also the finance minister, tabled a revised 2023 federal government budget of RM388 billion. Operational expenditure accounted for RM289 billion, or 74%, with RM99 billion set aside for development expenditure.

In a statement yesterday, Anwar said the difference between the current pension amount and the original pension amount will now be paid in the form of a special assistance called Penghargaan Khas Kepada Pesara (PKKP).

Anwar said this was to ensure the amount received by retirees is equivalent to the current pension amount as of June 2023, this after the Federal Court affirmed a lower court ruling striking down as unconstitutional a 2013 amendment to the Pensions Adjustment Act 1980.

The amendments introduced a new scheme that increases pension payments annually by 2%.

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