Govt spent RM116.7bil on pensions from 2020 to 2023, Dewan Rakyat told

KUALA LUMPUR: A whopping RM116.7bil was paid out to pensioners by the government over the last four years, says Dr Zaliha Mustafa (pic).

The Minister in the Prime Minister’s Department said that the pension payments covered retired civil servants, MPs, administrative personnel, political secretaries and judges between 2020 and 2023.

She said that RM26.39bil were paid out to 859,422 pensioners in 2020, RM28.04bil to 878,441 pensioners in 2021 and RM30.26bil to 902,999 pensioners in 2022.

“A total of RM32.01bil was paid out to 931,707 pensioners in 2023,” the Federal Territories Minister said in a written reply to a question by Khairil Nizam Khirudin (PN-Jerantut) in the Dewan Rakyat on Thursday (March 14).

In her written reply to Wong Chen (PH-Subang), Dr Zaliha said that the government is forecast to fork out an additional RM14.35bil as pension payments over the next seven years.

“The government forecast that pension benefits will increase annually.

“In 2023, the pension benefits totalled RM32.01bil and this is expected to reach as much as RM46.36bil in 2030 and RM120bil by 2040,” she said.

She also noted that the current contract appointment by the government is an interim measure pending the introduction of a new permanent appointment system for civil servants.

“The interim contract appointments will not be more than three years before the officer is permanently appointed without the need to undergo the appointment process again,” she added.

She said the new appointment scheme will allow the government to save in terms of pension payments in the long term to ensure better management of sustainable finances for the nation.

Meanwhile, in a written reply to Datuk Idris Ahmad (PN-Bagan Serai), Dr Zaliha assured that all current federal and state civil servants, who are serving on permanent basis and have opted for pension, will continue to recieve the benefits under the Pension Act even after the new appointment scheme is introduced.

In a circular on Jan 15, Public Service Department (PSD) director-general Datuk Seri Wan Ahmad Dahlan Abdul Aziz said that a new method for the permanent appointment of civil servants would be introduced to strengthen the public service remuneration system in Malaysia.

On Jan 26, Finance Minister II Datuk Seri Amir Hamzah Azizan said that civil servants who are under the pension scheme will not be affected by the finalised Public Service Remuneration System (SSPA).

It was previously reported that the move was aimed at improving the civil service salary structure system which is expected to be announced during the tabling of Budget 2025 this year.

The proposed improvement is expected to be finalised and presented to the Cabinet for approval at the beginning of the second quarter of this year at the latest, PSD said in statement on Feb 15.