PETALING JAYA: The government should study in detail data on pensions before embarking on any move to replace the current pension scheme with a contractual scheme as a way of overcoming the burden of a huge retirement payout for the 1.7 million civil servants, an academic said.
“We really need to break down the math and see how much pensions are paid out and to whom,” said Abu Sofian Yaacob, who teaches at Universiti Putra Malaysia’s business school.
The move announced by Public Service Department director-general Borhan Dolah has attracted resistance from both sides of the political divide.
The government currently spends some RM28 billion a year on pensions, and the figure is expected to grow.
Abu Sofian said there is disparity in the manner pensions are paid currently, where even ministers and elected representatives who served for much shorter periods than civil servants enjoy pension.
“Some get more than one pension, a ministerial pension and another for being an elected representative.”
Abu Sofian said pension is critical for those who retired as lower-ranking civil servants.
He proposed that when a civil servant reaches a high-ranking level, he could be given a contract based on performance, with a higher basic salary.
“So once you reach a certain level, you are given a two-year contract, and if you don’t perform, your contract can be terminated.”
He said the government can also consider giving retiring senior civil servants a golden handshake rather than paying them monthly.
But economist Ramon Navaratnam is backing the government’s proposal. He said the concept of pension is based on permanency in employment, a British concept to ensure the independence of staff.
He said this led to a situation where civil servants could not be easily removed over performance issues.
“This leads to civil servants just showing up for work, do the bare minimum and avoid getting in trouble with the law, as that is the only way to get sacked.”
Ramon, a former transport ministry secretary-general, said this was part of the reason for corruption taking place in government agencies, where businesses dealing with them could ensure things get done for a fee.
Ramon said the contractual scheme was bad news for underperforming civil servants.
“The world has become so competitive and the economy is not like it was before. Employees, be it in the public or private sector can no longer do the bare minimum and must be productive,” he said.