Retirees fear pensions will revert to pre-2013 levels in January

 

Retired civil servants will be badly hit if a special incentive payment is not continued beyond December this year, says former Cuepacs president Azih Muda.

PETALING JAYA: Retired civil servants are worried their pensions will revert to pre-2013 levels from January next year, following a court ruling that an annual 2% increment given since 2012 is unconstitutional.

Following the Federal Court’s decision on June 28, the government announced that the current pension payments, which include increments given over the last 10 years, will continue to be paid until the end of this year in the form of a special incentive payment to the retirees.

Persatuan Bekas Penjawat Awam & Swasta Malaysia (Pejasma) said a notice to that effect has been displayed on the homepage of the public services department (JPA).

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Pejasma president Azih Muda thanked the government for continuing to pay the existing sum despite the court’s ruling that the amendments to the Pensions Act 1980 by which they were introduced were unconstitutional.

“We are fortunate this is possible because the provision was included in this year’s budget. So, for the pensioners to continue getting the same amount, it must be provided for in Budget 2024 being drawn up now.

“Otherwise, we will be in deep trouble as the difference amounts to hundreds of ringgit,” he told FMT.

He said an ongoing salary revision being undertaken may take more than a year to finalise, and pensioners will be badly hit if payment of the special incentive is not continued while the process is ongoing.

As an example, the former Cuepacs president said a retiree receiving a monthly pension of RM1,413 in December 2012 would, taking into account an annual increment of 2%, draw RM1,757 per month presently.

“So, the difference in the amount will be RM344, which is now classified as a special incentive payment. Can you imagine pensioners, especially the estimated 60% in the B40 category, getting much lower sums suddenly?” he said.

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Azih urged Prime Minister Anwar Ibrahim to give his assurance that the government will continue with the special payments until the new salary scheme for civil servants with the adjusted pensions is put in place.

On June 27, the Federal Court affirmed a lower court ruling striking down a 2013 amendment to the Pensions Adjustment Act 1980 as unconstitutional. The amendments introduced a new scheme that increases pension payments to civil servants at a fixed rate of 2% annually.

However, the government said pensioners will not have to pay back the annual increments they have enjoyed over the last 10 years.

FMT has reached out to JPA for comment. - FMT