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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Settle judges’ pension claims out of court, say lawyers

PETALING JAYA: The government should take immediate steps to resolve the pension claims by a group of ex-judges as it is embarrassing for the matter to be decided by the court, a lawyer said.

A Srimurugan said the suit by retired judges over pension claims was unprecedented and may give rise to a perception that judges who hear the matter may have a pecuniary interest in the outcome.

Srimurugan said the Pensions Department should prepare a paper and present it to the Cabinet for immediate approval.

Two weeks ago, 28 former judges and seven dependents of deceased judges filed suit, calling for their pension payment to be adjusted based on current salaries of serving judges.

The problem arose when the government in 2015 made a salary revision for judges providing a higher pension plus a 2% annual increment for those who retired after the amendment. However, those who retired before 2015 continued to receive pensions based on their old salary plus a 2% annual rise.

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