PETALING JAYA: Retirement Fund Inc (KWAP) CEO Wan Kamaruzaman Wan Ahmad should not be too quick to tell civil servants about contributing for their own retirement, says Cuepacs President Azih Muda.
“It’s only been recently that KWAP took over management of pension funds and now he’s talking like this,” Azih said in reference to the agency that took over the pension operations from the government.
“Cuepacs is extremely disappointed with the KWAP CEO for saying this.”
This follows a report earlier in which Wan Kamaruzaman had said that civil servants may have to contribute to their own retirement income in the future, via a scheme that could be similar to how private sector employees contribute to the Employees Provident Fund (EPF).
“For all you know, they (the government) may decide that this (current) scheme is unsustainable. We may move to the EPF (type) scheme,” Wan Kamaruzaman had said, according to a report in The Sun.
Azih, however, told Wan Kamaruzaman not to decide on this matter for the government as the rights of civil servants were enshrined in the national Constitution.
“Don’t speak on this matter before the government does. This is not something that should be decided by the CEO in charge of funds.
“He has no authority to say whether the government should change the pension scheme or not. This is a huge disappointment to Cuepacs and to civil servants,” Azih said.
Under the current pension scheme for civil servants, only the government and other employers of civil servants, such as statutory bodies and local authorities, will contribute for pensions.
With this scheme, pensioners are assured of half their last drawn salary for life after they retire at 60. A spouse will receive the same amount in the event of a pensioner’s death.
KWAP runs the entire pension operations for the government and all other employers of civil servants, after having absorbed the entire public pension division that had previously been under the Public Service Department. All 250 employees of the division are now based at KWAP’s office in Cyberjaya.
Since November 2015, the company has also taken over the government’s monthly operations in paying out pensions to the 700,000 retirees. This was made possible following an amendment to the Retirement Fund Act 2007 early last year.
However, the funds for such disbursement still come from the government, while KWAP is paid an administration fee.