The ballooning cost of pension payments

KUALA LUMPUR: The government paid out a whopping Rm116.7bil to pensioners from 2020 to 2023, says Dr Zaliha Mustafa.

The Minister in the Prime Minister’s Department said the pension payments covered retired civil servants, MPS, administrative personnel, political secretaries and judges.

She said Rm26.39bil was paid out to 859,422 pensioners in 2020; Rm28.04bil to 878,441 pensioners in 2021; and Rm30.26bil to 902,999 pensioners in 2022.

“A total of Rm32.01bil was paid out to 931,707 pensioners in 2023,” the Federal Territories Minister said in a written reply to a question by Jerantut MP Khairil Nizam Khirudin in the Dewan Rakyat yesterday.

In response to Subang MP Wong Chen, Dr Zaliha said the government is expected to fork out an additional Rm14.35bil as pension payments over the next seven years.

“Pension benefits will increase annually. In 2023, pension benefits totalled Rm32.01bil and are expected to reach as high as Rm46.36bil in 2030 and Rm120bil by 2040,” she added.

She said the current contract appointments are an interim measure pending the introduction of a new permanent appointment system for civil servants.

“The interim contract appointments will not exceed three years before the officer is appointed permanently without undergoing the appointment process again,” she added.

Dr Zaliha said the new appointment scheme will allow the government to save in terms of pension payments in the long term to ensure better management of sustainable finances for the nation.

Meanwhile, in a written reply to Bagan Serai MP Datuk Idris Ahmad, Dr Zaliha gave her assurance that all current federal and state civil servants who are serving on a permanent basis and have opted for a pension will continue to receive the benefits under the Pension Act even after the new appointment scheme is introduced.

In a circular on Jan 15, Public Service Department (PSD) director-general Datuk Seri Wan Ahmad Dahlan Abdul Aziz said a new method for the permanent appointment of civil servants would be introduced to strengthen the public service remuneration system in Malaysia.

It was previously reported that the move was aimed at improving the civil service salary structure system, which is expected to be announced during the tabling of Budget 2025 this year.

The proposed improvements are expected to be finalised and presented to the Cabinet for approval at the beginning of the second quarter of this year at the latest, PSD said in a statement on Feb 15.