Pensioners Await Decision on Revised Payout
PETALING JAYA: Prime Minister Anwar Ibrahim’s announcement of a new remuneration system for civil servants in early 2024 has led to a flurry of activity among pensioners. The estimated 930,000 pensioners from the civil service, judges, former servicemen, and senators are eagerly awaiting a decision from the Kuala Lumpur High Court, set for January 15, which will determine if they will receive their revised pension arrears from 2022.
How it Started
Twelve years ago, the Najib Razak government introduced the Pension Adjustment (Amendment) Act 2013, which introduced a fixed 2% annual increment on all pensions from January 2013. This amendment prevented pensions from being revised each time new salary schemes were introduced every five years or so. As a result, a teacher who retired in 2012 on Grade DG 48 with 30 years of service would draw a pension based on their last drawn basic at that time. Today, that pension is at least 30% lower than what someone on the same grade with the same length of service gets.
Aminah Ahmad and 56 Pensioners
Unhappy with the anomaly created by the amendments, two groups of civil servants, two groups of ex-servicemen, a judge, and two senators went separately to the courts to get the amended law declared illegal. Former Wisma Putra officer Aminah Ahmad led a group of 56 retired civil servants to sue the government. She lost at the High Court but won at the Court of Appeal and also when the government appealed to the Federal Court. The apex court ruled that for those who retired before 2013, the payout is reverted to the December 2012 amount. And that the pensions be recalculated to correspond with new salary structures each time there is a revision.
No More 2% Annual Increment
The apex court also upheld that the 2% annual increment from 2013 was unlawful and had to be stopped. However, as a gesture of appreciation, the government continued to pay out the accumulated 2% increment, which is termed as a special incentive allowance for pensioners, as a fixed sum permanently. It must be noted that although there won’t be any more annual increments on pensions, these accumulated sums will be included as part of the pensions monthly. However, there was no announcement as to whether this will be a permanent arrangement.
Action to Seek Arrears
When the government refused to pay the revised pensions and arrears from 2022, Aminah’s lawyers wrote to the Public Service Department reminding them to implement the Federal Court order and pay the arrears from the date mentioned. In its reply, the government said that the 2013 amendments were not considered a salary revision, but an improvement in the structure of wages, which may not apply to pensioners. Aminah’s group then applied for a writ of mandamus from a Kuala Lumpur High Court to implement the decision to pay them post-2013 pension adjustment arrears effective from January 2022. The decision will be announced on January 15.
Pensions for Ex-Servicemen
Similarly, two groups of former servicemen have filed suits against the government asking for the pensions to be revised using the existing salary scale and structures. The groups argued that the government has violated Article 137 and/or Article 8 of the Federal Constitution read together with the Armed Forces Act 1972 which accords the right to military pensioners to receive pensions based on the revised basic salaries. The groups also cited Article 147 which they say overrides any other law on this.
Judges and Senators Win Suit
In 2023, the Court of Appeal upheld a Kota Kinabalu High Court ruling allowing a retired judge to claim a shortfall in pension payments paid to him between 2015 and 2022 following a salary revision in 2014. Former judge Ian Chin Hon Chong had sought to declare the amended Judges’ Remuneration Act 2014 void and inconsistent with Article 125 (7) of the Federal Constitution. The Federal Court refused to grant leave to the government to appeal the COA’s decision, making the ruling final. According to some reports, all affected judges have been paid their revised pensions and arrears in November. While in January last year, two senators won their appeal against a High Court decision disallowing them to receive revised pensions in accordance with the new allowances with effect from 2015.
Conclusion
The outcome of the January 15 decision will have a significant impact on the lives of pensioners, with many hoping to receive the revised pension arrears they are entitled to. The government’s stance on the issue has been met with criticism, with some arguing that the 2% annual increment was a necessary step to ensure the financial stability of pensioners. Others, however, believe that the government has a responsibility to honor the revised pension arrears.
FAQs
Q: What is the current situation regarding pension arrears?
A: The Kuala Lumpur High Court is set to deliver its decision on January 15, which will determine if pensioners will receive their revised arrears from 2022.
Q: What is the reason for the delay in paying pension arrears?
A: The government has refused to pay the revised pensions and arrears from 2022, citing that the 2013 amendments were not considered a salary revision, but an improvement in the structure of wages, which may not apply to pensioners.
Q: What are the implications of the January 15 decision?
A: The outcome of the decision will have a significant impact on the lives of pensioners, with many hoping to receive the revised pension arrears they are entitled to.