Court decision on pensions exposes a ‘time bomb’

[superadmin]

A recent court decision has saddled the government with a huge pensions problem that could cost billions of ringgit in backdated claims, if implemented.

The nation’s annual pension bill, which has been growing every year, could, some day, become a burden too heavy for taxpayers to bear.

This is a result of a Court of Appeal ruling on Jan 13 which declared as unconstitutional a government amendment to the way the pensions scheme is adjusted from time to time.

From 2013, a new scheme was introduced based on a flat rate of a 2% annual increment. Those who retired before 2013 received pensions based on the salary grade of the time.

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