KUALA LUMPUR, Oct 9 — A government retiree, who had previously won a court challenge to invalidate the government's new pension scheme, has now issued a legal letter with a 21-day deadline for the Malaysian government to pay the adjusted pension amounts due to pensioners.
In a letter of demand dated October 6, former civil servant Aminah Ahmad — who had filed the court challenge in her personal capacity and in the capacity of 56 others — claimed that the government had yet to adjust the pension calculation and pay the pension arrears to the pensioners, despite the pensioners' Federal Court win in June this year.
The letter of demand was addressed to the chief secretary to the government of Malaysia, and three Public Service Department officials: director-general, deputy director-general (operations), and director of its pension division.
In the letter of demand, Aminah demanded that these four officials take “immediate actions” to adjust the pension calculation (according to the Pension Adjustment Act 1980's Section 3 and Section 6 before it was amended to introduce the now-nullified new pension scheme) and to pay the pension arrears as adjusted from January 13, 2022 to her and the other former civil servants.
In the legal letter, Aminah gave the Malaysian government and the public service director general to take these immediate actions within 21 days of the letter being received.
In the letter, Aminah's lawyers said they have instructions to take further steps if the government and the public service director general if the demands are not fulfilled within the 21-day deadline.
When contacted by Malay Mail, Aminah's lawyer Datuk Baljit Singh Sidhu confirmed that the October 6 letter of demand was served by email and by registered post on October 6 itself.
In a statement to the media, Baljit said his client's letter of demand was issued due to the director general of public service's and government's failure to comply with the Court of Appeal's January 13, 2022 decision (which was upheld by the Federal Court on June 27).
Among other things, the Court of Appeal had ordered that the law amendments that introduced the new pension scheme on January 1, 2013 are null and void, and that these court orders are effective from January 13, 2022 onwards.
“The Government must obey the Federal Constitution and the judgment of the Federal Court and should not delay the implementations of the Court Orders as it amounts to injustice to the pensioners who are entitled to enjoy the fruits of their labour.
“In fact, most of these pensioners are in the later years of their lives and should not be deprived of their constitutional right accorded to them by the Government and further ordered by the Court of Appeal and the Federal Court.
“The Government should not hesitate to appreciate the contributions made by the public service pensioners’ in serving the nation and their welfare should be a matter of priority in achieving social justice,” he said.
Aminah had on behalf of the 56 others on April 28, 2017 filed the 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.
Aminah had argued that the 2013 amendments resulted in the pension adjustment scheme becoming “less favourable” to the pensioners, and that this went against the Federal Constitution's Article 147 which protects pensioners from any subsequent “less favourable” pension laws.
Aminah lost in the High Court on January 9, 2020, but won her appeal at the Court of Appeal in January 2022.
The Federal Court in June this year dismissed the government's appeal and upheld the Court of Appeal's decision.
The Federal Court agreed that there was a risk that the new pension scheme could cause a less favourable situation to the pensioners and said there was no need for the pensioners to have suffered actual financial loss before a less favourable situation could arise, and declared that the 2013 legal amendments — which introduced the new pension scheme — as invalid.
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).
As of December 31, 2022, there are 874,842 pensioners in Malaysia.
Prime Minister Datuk Seri Anwar Ibrahim had on July 12 said the Cabinet has decided to restore the pension amount paid to retired civil servants to the original amount following the Federal Court's decision, while the Public Service Department's pension division director on July 20 said a special payment would be paid to retired civil servants from July to December 2023 to ensure that they continue to receive the same amount as the current sum that they would have been receiving under the new scheme.
Anwar on July 27 said that a comprehensive study that would take up to eight months would be required before a proposed new salary and pension scheme for civil servants can be brought to the Cabinet, and had on September 3 said the salary scales of civil servants would be adjusted through the government's budget to be tabled in Parliament this Friday as a temporary measure until the comprehensive study is completed by next year.
