A group of 2,332 ex-servicemen had contended that amendments to the Pensions Act in 2013 were unlawful and their pensions should be revised and backdated.
PETALING JAYA: A group of former members of the armed forces have won an arbitration award for their pensions to be revised based on current salary scales, with an order that they be paid arrears.
The award was made by the Malaysia Arbitral Tribunal Establishment in accordance with a Federal Court ruling that amendments to the Pensions Act in 2013 went against a constitutional provision that any new pension scheme cannot be less favourable than the previous one.
The group’s lawyer, Engku Aminuddin Ibrahim said tribunal head Iszam Kamal Ismail had agreed that the amendments were ultra vires the constitution and had ordered the pensions to be revised.
“The decision will now go to the High Court for endorsement and enforcement,” he told FMT.
The action had been brought by 2,332 veterans from all three wings of the armed forces. They contended that the amendments to the Pensions Act were unlawful and had deprived them of their rights to revised rates each time the government adjusted the salaries of armed forces personnel.
Their spokesman, retired naval lieutenant commander Rafique Ali Ahmad Nordin, told FMT he had retired in 2001 and drew 46% of his last drawn pay. However, his last salary grade was now at a much higher scale following a few revisions, but his pension had remained the same.
“What I am getting now is only about 35% of the current basic salary of an officer with the same rank and with the same number of years of service. This is against the constitution which deals with pensions for government employees,” he said.
He agreed the decision would have a huge financial implication on the government. “But this is the fault of the last few governments. We have been deprived of our rightful dues for so many years so it’s time they pay us back,” he said.
The group had named the Armed Forces Council, defence ministry, finance ministry and the government as defendants.
The arbitration award follows the precedent set by the Federal Court in June in favour of pensioner Aminah Ahmad and 56 others who had filed action in 2017, claiming that the new scheme implemented in 2013 was potentially less favourable than the old one.