Ex-civil servants sue for Malaysian govt to immediately adjust pension using pre-2013 formula, pay alleged shortfall since 2022

KUALA LUMPUR, Jan 12 — A group of former civil servants have filed a fresh court challenge to get the Malaysian government to immediately adjust the amount of pensions they are paid every month.

Former civil servant Aminah Ahmad, who is suing in her own capacity and on behalf of another 56 retired members of the public service, is seeking two court orders against the government of Malaysia and the public services director-general.

In the lawsuit filed through a judicial review application at the High Court in Kuala Lumpur, the public service retirees want a court order to compel the Malaysian government to immediately make adjustments to the pension amount they are entitled to receive by using a pre-2013 formula, and for the Malaysian government to pay these alleged pension arrears to the 57 former civil servants within 14 days or within other timeframes set by the court.

The second court order that the 57 pensioners are seeking is for a declaration that the Malaysian government and the public services director-general’s non-payment of the alleged pension arrears are inconsistent with the Federal Constitution’s Articles 4(1), 5(1) and 8(1).

Article 4(1) states the Federal Constitution as the supreme law of Malaysia which will void any inconsistent laws, while Article 8(1) states that all persons are equal before the law and entitled to the equal protection of the law.

Article 5(1) states that no person shall be deprived of their life or personal liberty unless in accordance with the law, with Aminah claiming that the non-payment of alleged pension arrears would negatively affect “their financial wellbeing post-retirement” as it would be contrary to their right to a livelihood.

When contacted, the former civil servants’ lawyer Datuk Baljit Singh Sidhu confirmed to Malay Mail that the lawsuit had been filed this afternoon.

As the lawsuit was filed through a judicial review application, the former civil servants will first have to obtain leave from the High Court in order for their actual lawsuit to be heard. No court dates have been fixed for the case yet.

In a court document filed as part of the lawsuit, the former civil servants explained that amendments were made in 2013 to the Pensions Adjustment Act 1980, which resulted in a change in the formula used to calculate their monthly pensions, describing this as the “post-2013 formula”.

The difference was that the “pre-2013 formula” would mean that the retirees’ pension amount would go up whenever still-serving government employees’ salaries are increased, while the “post-2013 formula” meant the retirees’ pension amount would receive a fixed increment of two per cent every year.

The government retirees said that the “post-2013 formula” would actually cause them to receive less pension as compared to the “pre-2013 formula”.

To illustrate this difference, they gave the example of a government employee who retired with the rank “Jusa C” after 32 years and eight months in service (1971 to 2004) who would receive a pension of RM6,845.85 in 2017 based on the post-2013 formula.

They claimed that the pre-2013 formula would result in the pensioner receiving RM8,752.14 based on the latest revision of an existing Jusa C civil servant’s salary of RM14,587 in 2013, while the post-2013 formula would mean the pensioner would get about RM1,906 lesser than under the pre-2013 formula despite the two per cent annual increment in pension amount.

Aminah previously succeeded at the Court of Appeal which had on January 13, 2022 gave a judgment which effectively revived the pre-2013 formula, and at the Federal Court which had in a June 27, 2023 decision upheld the Court of Appeal’s decision.

Following those previous two court victories, Aminah and the other 56 pensioners claim that they were entitled since January 13, 2022 — the date of the Court of Appeal decision — to be paid pensions amount calculated using the pre-2013 formula.

Previously, the Public Services Department (JPA) had in October 2023 responded to Aminah’s October 2023 legal letter — which demanded pension adjustments to be made after the Federal Court’s June 2023 ruling — by noting that the Federal Court’s June 2023 ruling had restored the old pension scheme but did not order the government to pay retrospective payments to the pensioners.

The JPA had also said the Court of Appeal’s January 2022 decision had declined to order the government to make retrospective pension adjustments to pay for any shortfall, as it had not been proven that the pensioners in the court case had suffered any “actual loss”.

The JPA had also said the last increment for existing civil servants’ salaries was in 2012 and that this meant there would be no adjustments to pensions since 2013 under the now-restored pre-2013 formula.

But even as pensioners start receiving pension amounts under the pre-2013 formula from July 2023 onwards, JPA had in October told Aminah the government would give special financial aid from July to December 2023 to pensioners to top up the pension amount received.

In their lawsuit filed today, Aminah and the 56 other pensioners however insisted that their pensions should be calculated and adjusted based on the pre-2013 formula from January 13, 2022 onwards (the Court of Appeal’s decision date), as they insisted that there had been adjustments to the salary of existing government employees in 2013 or onwards.

What happened before this

On April 28, 2017, Aminah had for herself and on behalf of 56 others filed a lawsuit against the government of Malaysia and the public services director general to challenge the 2013 amendments to the Pensions Adjustment Act 1980, which changed the pension adjustment scheme to a new system with an annual two per cent increment.

Under the old pension scheme, the pension amount is adjusted or increased whenever there is a salary revision for serving government employees (who are of the same grade as the pensioner).

Under the new pension scheme introduced in 2013, when salaries for current civil servants go up, it would not affect the pension sum to be paid to pensioners even if they are of the same grade. The annual two per cent increment under the new pension scheme meant pensioners’ pension amount would not need to be dependent on salary revisions.

Aminah lost in the High Court on January 9, 2020, but won her appeal at the Court of Appeal on January 13, 2022. The Federal Court on June 27, 2023 dismissed the government’s appeal and upheld the Court of Appeal’s decision.

The Federal Court struck down the 2013 amendments (which introduced the new pension adjustment scheme of an annual 2 per cent increment) as unconstitutional, and restored the previous version of the law (which contained the old pension adjustment scheme where existing public servants’ salaries revision would also increase pensioners’ pension amount).

Following the Federal Court decision, the Malaysian government has started carrying out a comprehensive study for a proposed review or proposed new salary and pension scheme for civil servants, with the review previously reported to be expected to be finalised by the end of 2024.

While waiting for the study on the review of civil servants’ salary to be completed, the prime minister had said the government would pay an “early incentive payment” this year in the form of RM2,000 to civil servants grade 56 and below, and a RM1,000 incentive would also be paid out to all government retirees.

 

 

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