FROM Feb 1, the new recruits into the country’s civil service will have to say goodbye to the pension system. Alternatively, they will be placed on contract system of employment with contributions to the Employees Provident Fund (EPF).
By placing civil servants on a fixed term, the contract system of employment will scrutinise their progress.
I understand that civil servants already under the pension scheme will continue in the same scheme. The placement of new recruits into the civil service would not affect the 900,000 former civil service employees.
At about 1.7 million, Malaysia’s civil service is one of the most bloated civil services in the world. The announcement on civil service reform is nothing new. Proposals for reforms have been in the air for a long time. It is just that the past governments did not have the political will to introduce the changes.
While the complete proposal of the changes is not clear, what is obvious is that new recruits to the civil service will not be placed on the pension system.
Slashing multiple pensions
Paying pension to nearly 900,000 former civil servants and former politicians poses a huge financial burden to the government. More than this, some former civil servants and politicians enjoy multiple pensions.
There are already suggestions for them to opt for one pension and not multiple pensions. While the new scheme for the fresh recruits might not be a problem, cutting down on multiple pensions might pose legal and constitutional problems.
The multiple pensions system is very much embedded in the system and protected by the law. It would be difficult for the government to reduce multiple pensions to one from a constitutional perspective.
The government with parliamentary majority and the ground swell against the provision of multiple pensions might be able to reduce these multiple options into one.
There are no two ways about reforming the civil service. The public sector needs reforms badly. Reforming the pension system might be the way to start.
An alternative system to pensions must not only reduce the financial burden of the government or the taxpayers’ money. The new system should have in-built mechanisms to improve the performance of the civil service.
The real challenge is whether the government can co-opt the existing civil servants who are on pensions into an alternative system.
Opposition
However, tampering with the civil service, the bastion of Malay political and administrative power might not be an easy thing. As it is, Prime Minister Datuk Seri Anwar Ibrahim has been accused of trying to weaken the Malay political base by tampering with the civil service.
Unlike other countries, the civil service in Malaysia is seen as a bastion of Malay political power where there exists close nexus between the Malay political and administrative elites.
This nexus is considered essential for the socio-economic upliftment of the Bumiputra community. Moreover, in the charged ethnic environment, the civil service is looked upon by the Malays as counter-balance to the non-Malay domination of the private sector.
This is the reason why civil service reforms were talked about in the past but there was no political will to implement them.
Anwar might give the impression that he has finally seized the bull by its horns by trying to end the pensions for the new recruits starting from Feb 1.
But reforms would not make sense if the existing civil servants are still on the pensions system. Maybe, Anwar or the government is not revealing the full details of the reforms in the public sector.
Anwar might think that by going for the low hanging fruits, the reforms could be gradually introduced over a period of time. But Anwar knows very well that tampering with the Malay dominated civil service can be explosive and politically suicidal.
It must be remembered that 80% of civil servants are not sympathetic to the present government. – Jan 30, 2024
Former DAP stalwart and Penang chief minister II Prof Ramasamy Palanisamy is chairman of the Urimai (United Rights of Malaysian Party) interim council.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
