KUALA LUMPUR: The cost of the public servant salary system based on contributions from the Employees Provident Fund (EPF) is 4.5 times lower compared to the existing pension scheme.
Minister in the Prime Minister's Department (Federal Territories) Dr Zaliha Mustafa said that if the new salary system is implemented, it can provide savings and relief to the government's fiscal burden in the long term.
"The simulations used in the initial stage of the study of this new salary system show that the proposed contribution method is 4.5 times lower compared to the current pension expenditure for each public servant," she said in a written reply posted on the Dewan Rakyat portal.
She was responding to Ahmad Fadhlj Shaari's question (PN-Pasir Mas) regarding the expected amount of savings the government would obtain when the new civil service pension scheme is abolished.
Dr Zaliha said the government is studying a new salary system to optimise the recruitment and filling of new positions in the civil service, given the increasing pension burden each year.
She said it is to ensure the government can manage the country's financial expenditure more sustainably.
"However, the existing pension scheme for serving officers and existing retirees will continue," she said.
Meanwhile, in response to Aminolhuda Hassan's question (PH-Sri Gading) regarding the possibility of a decrease in productivity if the abolition of the pension scheme were to be implemented, Dr Zaliha said the productivity of civil servants would not be affected by the introduction of this new retirement benefit.
She said officers appointed through the new method will receive salaries, allowances, and facilities similar to those enjoyed by permanent and existing pensioned officers.
"This includes any fixed allowances such as the Permanent Civil Service Allowance and Housing Allowance, as well as other allowances eligible for specific service and assignment schemes.
"At the same time, the ongoing Civil Service Salary System Study also takes into account aspects of Malaysia's civil service capability to attract the country's best talent to join and serve the government," she said.
Previously, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi was reported to have said that the cabinet agreed that appointments for new permanent civil servants after this will not have pensions.
According to Zahid, for existing civil servants, their pension status will not be affected, while new civil servants will make contributions through the Employees Provident Fund (EPF).
He said the government made this decision after assessing that by 2040, the amount of pensions the government would have to bear if the existing salary system is not amended would reach RM120 billion annually.
