KAJANG: The government is introducing a new civil service hiring policy, which will include a new pension scheme.
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said under this method, new hires in the civil service will contribute to retirement schemes like the Employee Provident Fund (EPF) and Social Security Organisation (Perkeso).
He said the shift comes as part of a broader initiative to phase out traditional pensions.
He said the contribution rate for these schemes would align with the prevailing rates observed among current employees in the private sector.
"Therefore, the long-term approach is to implement this new system for newly-appointed civil servants, while the existing ones will continue with the current system, which includes pension benefits.
"The announcement of specific dates for the implementation will be made by the Chief Secretary (Tan Sri Mohd Zuki Ali), and it is expected to take effect this year," Zahid said after visiting the Malaysia Civil Defense Force headquarters near here today.
He said the new civil service hiring policy will reduce financial liability. He said the government's liability for pension payments will reach RM120 billion in 2040 if the existing policy for the hiring for permanent positions in the civil service continued.
"As mentioned earlier, by the year 2040, the pension liabilities that the government would have to bear, in the absence of this new system, will amount to RM120 billion.
"This would impose a long-term burden on the government, particularly on the Retirement Fund Inc (KWAP), which may face challenges in making investments for dividends or the expected return on investment (ROI), especially if its investment portfolio is substantial," he added.
Zahid also ensured that those civil servants who are hired under the current policy will still receive their pension once they complete their service.
On a related matter, he clarified that appointments via contracts in the civil service is an interim measure towards the implementation of a new permanent appointment method for public officers, which will involve amendments to the relevant acts.
Earlier today, the Public Service Department said in a statement that officers appointed through contract will be permanently appointed through the new method under the public service remuneration system that will be finalised later.
On Sept 27, the Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Datuk Adnan Mat had criticised talk of abolishing pension schemes for public servants, saying it should be considered a privilege for those who serve the public.