By Remy Majangkim, MA63, Activist, Tutor, and Historian
KOTA KINABALU: Gong Xi Fatt Chai, and good day to you all. I wish all of you good health. In the past few weeks, we were informed by the Prime Minister that the government is phasing out the pension scheme for new government recruits.
That means a new batch of public service workers will no longer be indebted to the government pension scheme.
So what is a pension? It is a regular payment made to someone who is no longer working. It is normally done by the government that a person works for and retires after old age. As of October 2023, the budget put aside for pension payments is around RM 31 billion, with a 2% increment every year. Now that is about 10% of the operating expenditure of the country.
On top of that, we need to pay external loans, a blunder made by the former Prime Minister Najib Razak in the 1MDB fiasco. However, over the years, steady payments have been made, and currently, the country still has a shortfall of RM 17 billion.
Now there is a proposal to eliminate paying multiple pensions to former politicians that have been elected myriad times in office.
This action is lauded, and the Prime Minister has the power to do so, applicable to those serving both in the state and federal governments.
Although we have our own pension scheme, under Pension Ordinance 1963, it was declared under the Federal as stated in the Federal List (Ninth Schedule) item 6(d) of the Federal Constitution.
So what is the next best thing for our retirement plan? A few years ago, I had the liberty to talk to friends of mine from London on the same topic. It was said Malaysia has the very best retirement platform called Kumpulan Wang Simpanan Pekerja (KWSP).
Suffice it to say they were envious of such a system in place, notably in a developing country such as ours. Although people in the United Kingdom were paid handsomely in services and wages, they were forced to create their own retirement plans. Japan has a mandatory pension scheme, but the government increases their retirement age to 65 years old. It was said their salary cut was around 30% for the pension scheme. So on average, their monthly pension is 16,610 yen, or RM 530 per month.
Our KWSP system is not watertight, as it was shown during the pandemic; “the flood gates” were open for the public to withdraw the funds for survival. All along, the government under Perikatan Nasional used these excuses to help people during the pandemic, but using people’s own money.
There are two distinctions that you need to take from this pension debacle.
1) Leadership means the ability and foresight to bring the nation forward, ensuring their interests are cared for.
2) Good management: there should be no interference from the government that allows such hands into the cookie jar. Monies that have been collectively deposited should be invested prudently and wisely.
Finally, we must learn from our mistakes by not letting the same scoundrel be elected to the highest office. We are paying the price for the blunder they made and the future generations ahead of us. As for the multiple pension recipients, should it be phased out? Common sense dictates it should be put to rest. We need quality people to manage the country, not the same people who take advantage of the current system.
