08 January 2009


I REFER to your report "Close watch on policemen who switch schemes" (NST, Jan 4) which quoted Post-Service Division director Datuk Yeow Chin Kiong as saying that a civil servant, on being dismissed from service, would lose his right to a pension.

He went on to say that an employee's provident fund kept in the EPF is like private property. In my opinion, the pension is also like private property and pensionable officers should be paid their pension even if they had been dismissed from service.

At present, Section 9 of the Pension Act 1980 implies that if a pensionable officer is dismissed from service, there will be no grant of pension. And by virtue of Section 21 of the act, the right to one's pension ceases upon conviction.

In my opinion, both sections are inconsistent with the Federal Constitution. I think the Post-Service director and Public Service Department (PSD) have all these years been wrong in withholding the monthly pension of pensionable public service officers who had been dismissed from service. The pensions are nothing more than an officer's "deferred pay" and, to use the words of the Post-Service director, is private property.

I think neither the Post-Service director nor the PSD has fully understood the legal implication of the "pension" scheme as enshrined in the Federal Constitution. They work on the wrong premise that a "pension" is a privilege granted upon a pensionable officer's retirement. This is clearly constitutionally wrong.
Article 147 and Article 160(2) of the Constitution talk about "pension rights". And Article 160(2) defines "pension rights" as including "superannuation rights" and "provident fund rights". Thus, the monthly pension that pensioners receive is in fact their "superannuation rights". Therefore, if the "provident fund rights" which is kept in the EPF is considered private property, so is the "superannuation rights".

Article 160(2) of the Constitution also defines an officer's remuneration as including salary or wages, allowances, pension rights, free or subsidised housing, free or subsidised transport and other privileges capable of being valued in money. This clearly shows that the remuneration of public service officers includes a pension element which, like the employee's provident fund, is kept by the government in the Federal Consolidated Fund to be paid later during the officer's old age. Unlike the EPF, this pension element which is kept aside by the government is not seen or known by the officer.

Here, I would like to quote former Cuepacs president A. Ragunathan, who has been involved in numerous salary negotiations of public service officers. In a letter published in the New Straits Times on May 9, 2006, he wrote: "...a payment of pension is considered deferred pay... the salary structure of public employees is based on the main principle 'rate for the job'. In determining the rate, the pension element or its cost is set aside during an employee's working span so that when he retires, what he would have accumulated as 'deferred pay' can be used to look after him in his old age."

Therefore, isn't the pension scheme, which includes the officer's "superannuation rights", similar to the provident fund scheme, where the government tops up the salary of the officer by 11 per cent and keeps it aside in the EPF? The only difference is in the method of payment; one monthly and the other in a lump sum. This proves that the pension element, which forms part of the officer's remuneration and is kept aside by the government, in law and in fact belongs to the officer concerned. It is also private property.

A pensionable officer is, therefore, entitled to his "superannuation rights" irrespective of whether he has retired or had been dismissed from service. A dismissed employee, however, might not be granted his gratuity or other benefits and privileges.

The failure of the Post-Service Division and the PSD to fully comprehend the term "pension rights" has led to them offering those who had opted for the EPF scheme to switch to the pension scheme.

By right, a permanent officer is categorised into two groups. One group is for those who opt for the "superannuation rights and provident fund rights" where, upon retirement, they will be paid a monthly pension plus whatever monies have been kept in the EPF. The other is for those who opt only for the "provident fund rights" scheme, where they keep aside eight per cent of their salary plus the government's contribution of 11 per cent in the EPF.

Both categories of officers, being permanent officers, should be entitled to all the privileges and benefits that are accorded to any retired permanent officer. If this is done, there is no need for this "switching" option. It surprises me to find that a permanent officer who opts for a "provident fund rights" scheme of service is denied free medical service upon retirement.

The belief among many heads of department that a dismissed pensionable officer would lose his right to a pension has led to many heads of department taking disciplinary action with a view to dismissing officers they dislike. Perhaps the Post-Service director should also keep a close watch on these heads of department.

And lastly, for those pensionable officers who have been dismissed from service and whose "superannuation rights" have been withheld, perhaps this is the right time for them to write to the Post-Service director requesting that they be paid their monthly pension.

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