Govt applies to suspend adjustments to retirees’ pensions pending appeal

Govt applies to suspend adjustments to retirees’ pensions pending appeal

KUALA LUMPUR: The government has filed an application to delay adjustments to the pensions of retired civil servants ordered by the High Court pending the outcome of its appeal.

In an affidavit affirmed by public services department (JPA) director-general Wan Ahmad Dahlan Abdul Aziz, the government said there were special circumstances warranting a stay of the High Court order.

“The order, made on Jan 16, affects not just the 56 litigants but 531,976 pensioners or their dependents and will cost the government a whopping RM1.7 billion,” he said in the document sighted by FMT.

Wan Ahmad also said the balance of convenience favoured the grant of a stay.

He said computation of the payments had to be done manually and would take time.

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The payout would also have financial implications for the government, Wan Ahmad said, adding that the government would face an uphill task in recovering the payments should it win its appeal.

The government has filed a certificate of urgency for its appeal to be heard expeditiously.

Lawyer Shukor Ahmad confirmed receipt of the application today, which included the affidavit affirmed by Wan Ahmad.

The government filed its notice of appeal on Jan 23, seeking to reverse a High Court order made by Justice Amarjeet Singh.

The judge ruled that a service circular issued in 2016 had the effect of a salary revision for government servants.

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As a result, Amarjeet said government pensioners were entitled under the Pensions Adjustment Act 1980 (PAA) to pensions corresponding to the adjusted salary.

“Given the Federal Court ruling (dismissing the government’s appeal), the backdated pension is to be paid beginning January 2022 (the date of the Court of Appeal ruling) until the next salary revision,” he said.

He ordered the director-general of the JPA to make the pension payments within three months of Jan 16.

On Feb 29, 2024, the High Court granted former civil servant Aminah Ahmad and her co-applicants leave to commence judicial review proceedings after the attorney-general raised no objection.

The application named the government and the JPA director-general as respondents.

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It sought to compel the respondents to implement adjustments to their pensions in accordance with the formula prescribed in Sections 3 and 6 of the PAA before amendments to the law were made in 2013.

Under the old scheme, a retiree’s pension was to be revised based on the prevailing salary of incumbent civil servants in the same grade.

The 2013 amendments introduced a flat-rate annual increment of 2%.

Aminah lost her initial suit in the High Court in 2020.

However, the Court of Appeal in 2022 overturned the decision, ruling that the amendments to the PAA in 2013 were null and void as they had put the applicants in a less favourable position than previously, in breach of Article 147 of the Federal Constitution.

On June 27, 2023, a five-member Federal Court bench upheld the Court of Appeal’s decision.