PUTRAJAYA: The Federal Court today dismissed an appeal by the government and the Public Service Department (PSD) director-general against a Court of Appeal decision to declare an amended pension law null and void.
A five-member panel chaired by Court of Appeal president Tan Sri Abang Iskandar Abang Hashim ruled that both appellants' appeals had no merit.
Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah when reading the unanimous decision said the amendments made to Section 3 and 7 of the Pensions Adjustment (Amendment) Act 2013 would be less beneficial to the respondent.
Aminah Ahmad, who retired as a civil servant with the Foreign Affairs Ministry, sued in her personal capacity and on behalf of 56 retired members of the public service, claiming that the amendments to the Pensions Adjustment Act resulted in a situation "less favourable" to her as compared with the preceding retirement adjustment scheme under the Pensions Adjustment Act 1980.
Under the old scheme, a retiree's pension is revised based on the prevailing salary of incumbent civil servants in that grade. However, the 2013 amendment was introduced based on a flat rate of 2 per cent annual increment.
On Jan 13 last year, the Court of Appeal ruled in favour of Aminah and granted a declaration that the amendments to sections 3 and 7 to the Pensions Adjustment (Amendment) Act 2013 which came into effect from January 2013 were null and void as they contravened Article 147 of the Federal Constitution.
The appellate court held that with the declarations, the situation prevailing before the amendment to section 3 to the Pensions Adjustment Act 1980 will be revived and continue to apply.