Govt to amend Pensions Act in response to Federal Court ruling

KUALA LUMPUR: The government is in the process of amending the Pensions Adjustment Act 1980 (Act 238) to restore the legal provisions before the Pensions Adjustment (Amendment) Act 2013 (Act A1447).

In a written parliamentary reply, Minister of Prime Minister's Department (Sabah, Sarawak Affairs and Special Functions) Datuk Armizan Mohd Ali said the move was in line with the Federal Court's ruling on June 27.

"The Federal Court decided that Section 3 and Section 7 of the Act A 1447 were null and void.

"As such, the government is in the process of amending Act 238 to restore the legal provisions before Act A1447," he said.

Armizan said this in response to Khoo Poay Tiong (PH-Kota Melaka).

Khoo had asked whether the government intends to amend Act 238 following the decision of the Federal Court on June 27, which ruled that Sections 3 and 7 of Act A1447 are invalid and that Act 238 still applies for pensions adjustment.

On June 27, the Federal Court 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.

When reading the unanimous decision, Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah said the amendments made to Sections 3 and 7 of Act A1447 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 Act 238.

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 two per cent annual increment.

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