Government pension reform won't deter JPA scholars - Activist

SHAH ALAM - Community activist Liyana Marzuki downplayed concerns that abolishing the pension scheme for new civil servants would deter students sponsored abroad by the Public Service Department (JPA) from returning to serve in the government sector.

She argued that not all individuals enter the public service solely for the pension but also for the opportunity to serve the country, build networks and gain valuable experience.

"The times have changed, pensions are not the main factor for taking up positions in the government service; we are not like in the past where we joined the civil service just for the pension.

"I agree, but I'm not saying that we should immediately abolish this pension scheme without refining it," she said during the live broadcast of the Sinar Forum titled 'Pension or EPF?' at Karangkraf Group Complex yesterday.

While agreeing with the need for reform, she cautioned against immediately scrapping the existing scheme without proper refinement.

Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi's January announcement noted that new permanent civil servants would no longer receive pensions but instead contribute to the Employees Provident Fund (EPF).

The current pensions of existing civil servants remain unaffected.

Addressing concerns about the suddenness of the announcement, Liyana highlighted that the pension issue has been under discussion for over a decade, with previous administrations also raising it.

Instead of dismissing it as mere rhetoric, she urged the government to release concrete data from relevant institutions like the Finance Ministry and Treasury.

"If possible, support the sudden decision issue with the existing data from the Finance Ministry and the Treasury.

"We need to know now that in the national expenditure, 48 per cent of it comes from pensions and civil service salaries.

"In 2023, RM31 billion was paid for civil service pensions, while RM107 billion was for salaries and it is expected that by 2040, the figure will increase to RM120 billion, which is four times what we have now just by paying pensions," she said.

Liyana also reminded the public that the Government Funding Act 1983 prohibits using loans to pay for pensions and salaries.

This necessitates utilising collected taxes to manage the projected RM120 billion expense in 2040.

"The burden of paying these future costs would otherwise fall on future generations entering the workforce.

"Addressing this issue now prevents it from becoming their problem later," she added.