NST Leader: Pension reform

The most coveted perk in government employment, other than medical and hospitalisation benefits for employees and their immediate families, is, undoubtedly, the pension scheme.

This is the reason the government doesn't do national drives to hire new recruits, other than media advertisements for specific jobs.

The benefits, especially the pensions, speak for themselves, on top of the annual pension increment of two per cent since 2013. Which sector offers the better retirement scheme? Private or public?

Slog for decades in the private sector and workers retire with an accumulated sum of Employees Provident Fund savings, accessible partially at 50 and fully at 55.

The substantial cash could buy a new home or bankroll the kids' education and marriages, and still have enough left to book that dream European vacation, start a small business or opt for that much-needed surgery.

However, if the spending is not prudently managed, the EPF safety net inevitably dissipates, compelling retirees to go back to work, but never in the same capacity or salary range.

On the flip side, generally laidback government pensioners appreciate their pension's long-term stability and benefits: security and consistency of a monthly stipend, half of what they used to earn and based on a quantum tied to their length of service. But the best part is, they get to work part or full time, leaving their pensions untouched, automatically converting it into handy savings or even investments.

Endowed also with continued medical and hospitalisation benefits, a government pension is a useful and practical scheme, especially for pensioners in their golden years.

Furthermore, once they die, their pensions are automatically inherited by their surviving spouse, so there's no issue of immediate financial hardship. That's why when Khairy Jamaluddin suggested reforms to end pensions for future hires, but retain the system for current civil servants, the reaction was, to say the least, "antsy".

Despite articulating sound concepts, Khairy, who was once health minister and member of parliament, but is now in the political wilderness and enjoying an influential spell as a podcaster, was categorically dismissed, especially by the Congress of Unions of Employees in the Public and Civil Services.

Pointing to the annual RM30 billion the government has to spend annually on pensions, Khairy highlighted the worrying prospect that the expenditure may bloat to RM50 billion by 2030, an untenable "ticking time bomb".

But Khairy missed the point: the government pension scheme will likely remain intact out of pure political expediency. Attempts at reforms in the past, no matter how well-meaning, were rejected or ignored because it is a vote bank not to be trifled with, even as an earnest idea.

For a sitting administration, tweaking the pension scheme, even minutely, could provoke a critical political backlash. Khairy could well afford to ruminate and even test ideas on pension reforms when he is out of the government.

You wonder if he would dare broach reinventing this sacred cow if he was a cabinet appointee.

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