Kuala Lumpur: The government has filed an application to stay the High Court’s decision that allowed a judicial review by a pensioner regarding the payment of pension adjustments for retirees based on their final salary, as per the 2016 Public Services Department Circular, effective January 2022.
According to BERNAMA News Agency, the government and the Director-General of Public Service (KPPA) submitted the application at the High Court, citing special circumstances that necessitate the stay of the decision pending an appeal at the Court of Appeal. The Director-General, Tan Sri Wan Ahmad Dahlan Abdul Aziz, explained in an affidavit that the pension adjustment and arrears, estimated at RM1.7 billion from January 2022, would impact not only the applicants but also 531,976 other pensioners.
Wan Ahmad Dahlan emphasized that the financial implications of these payments would require the government to reorganize funds allocated for infrastructure, social, and economic development. This restructuring is necessary to channel funds to the Retirement Fund, as advised by the Ministry of Finance, to manage the unexpected expenses arising from the court order.
He further elaborated that the pension adjustment process, involving 531,976 pensioners, is complex and requires coordination among 18 officers in the Pension Division and the Public Service Department (PSD), along with assistance from operational officers at the Retirement Fund Incorporated (KWAP). This process could impact the execution of core duties related to retirement and pension affairs handled by the PSD.
The calculation of pension arrears is described as a long and complicated process, as it involves manually reviewing service records of pensioners with various job grades and service schemes who retired on or before July 1, 2016, and are still receiving pensions as of January 2022. The PSD needs to determine the eligibility of pensioners for the adjusted pensions as of January 2022.
Additionally, the PSD is tasked with recalculating pensions to align them after 2024, following the salary adjustment announced by the government for pensioners who retired on or before July 1, 2016. The amount of pension to be received after 2024 will change based on the adjustments required by the High Court’s decision.
Wan Ahmad Dahlan noted that if the appeal favours the government, recovering pension arrears already paid would be time-consuming, costly, and require significant effort. This would involve reversing all processes carried out to adjust pensions according to the court’s order, including the 2024 pension adjustment.
In cases where pensioners refuse to return the paid arrears, the government and KPPA would need to file lawsuits in court to recover the amounts, which would further extend the process and increase costs.
Senior Federal Counsel Ahmad Hanir Hambaly confirmed the application for the stay when contacted by reporters. The High Court Judge Datuk Amarjeet Singh had previously ordered the government and PSD to pay the arrears within three months from the judgment date of January 16, following a judicial review application filed by Aminah Ahmad and 56 other retired public service members.
Aminah, a former civil servant with the Ministry of Foreign Affairs, filed the review application to expedite pension adjustments to the qualifying amount per Sections 3 and 6 of the Pensions Adjustment Act 1980 before amendments made under Sections 3 and 7 of the Pensions Adjustment Act (Amendment) 2013. She also sought an order for the pension arrears to be paid within 14 days and a declaratory order stating that the failure to pay violates the Federal Constitution. Under the old scheme, pensions were revised based on the prevailing salary of incumbent civil servants in that grade, but the 2013 amendment introduced a flat rate of two per cent annual increment.