MALAYSIA
Reform of Malaysia’s Public Service pensions, left on the backburner for years over fears of upsetting voters, is finally being brought out for consideration.
Prime Minister, Dr Mahathir Mohamad said in a recent media conference that he wanted to find a way of continuing to pay the pensions — which extend to the wives and children of Government workers who have died — “but we have to find a way that the Government can afford [it] and Government officers don’t lose out”.
He pointed out that PS employees had received numerous pay rises under the previous Government, which was partly to blame for a MYR1 trillion (A$36 billion) national debt.
“Payments of pensions are now a problem … previously the monthly salaries of senior officers never exceeded MYR6,000 [A$2,000] or MYR7,000 [A$2,500] and they would receive MYR3,000 pension [A$1,066] a month,” Dr Mahathir said.
“However, we are also aware that living costs have increased considerably, so we need to study the pension scheme from time to time.”
He said the previous Government had put in place a 2 per cent annual automatic increment for pension payments in order to neutralise the worry of inflation.
“This is a rarity globally where the norm is for shared burden or borne entirely by retirees instead of being guaranteed by taxpayers’ money,” Dr Mahathir said.
Former Director-General of the Public Service Department, Borhan Dolah raised the possibility of newly appointed PS staff no longer being eligible for the pension in return for an improved contract scheme.
This could begin next year, reducing the Government’s financial burden by up to MYR5 billion (A$1.8 billion) a year.
Meanwhile, the Congress of the Union of Employees in the Public and Civil Services (CUEPACS) has called for a minimum bonus of one month’s salary for PS employees to be included in the 2020 Budget.
President of CUEPACS, Azih Muda said this would be fair recognition of the “contributions of Civil Servants towards the nation’s continued stability, security and prosperity”.
Kuala Lumpur, 24 September 2019
