The civil servants’ pension is like the elephant in the room; everyone knows the existence of the problem, but no one is going to do anything about it due to various reasons (including political consideration).

Such a phenomenon will only aggravate the problem because we are burying our heads in the sand, refusing to deal with the problem. Not seeing the problem does not mean the problem will vanish on its own.

Additionally, the pension amount will snowball into a monster too big for the government’s finances to handle.

So, how heavy is this burden? In 2006, relevant expenses ran up to RM5.86 billion, expanding four-fold to RM23.87 billion in 2018, rising further to RM24.9 billion and RM26.38 billion in 2019 and 2020 respectively.

It has been estimated that the total pension amount will top RM46.6 billion by 2030, and a whopping RM120 billion by 2040!

In the long run, reforming the civil servant’s pension system is imperative. The questions now are: who and how to do it?

The administrations before this have actually realised the intensity of this problem, and it is not the first time proposal of replacing the pension system with EPF has been raised.

In 2017, then Finance Minister II Johari Abdul Ghani said the government was mulling incorporating newly hired civil servants into the EPS system to cap the government’s pension cost as a result of the ballooning strength of civil service. Unfortunately, it was all talk and no action!

Into the Unity Government’s second year in power, this problem has once again resurfaced, much to the ire of CUEPACS, which is avidly against the abolition of civil servants’ pensions, arguing that any government measure must be established upon the principle that the existing benefits enjoyed by the country’s civil servants will not be compromised.

PN Chairman Muhyiddin Yassin said the government must not neglect the welfare of civil servants while trying to address the financial burden arising from civil servants’ pensions. Bersatu’s information chief Razali Idris argued that the proposed move could give rise to the shortage of civil servants in Malaysia over the next 10 years.

Some political leaders feel that pensions for cabinet ministers and elected reps should be removed instead, while PM Anwar Ibrahim agreed the new system should apply to politicians, too.

Pension reform is absolutely a big headache for the government, and it is within expectation that any attempt to institute the reform will invite backlash from some quarters, as it entails the interests of civil servants.

The government indeed has the obligation to take care of the well-being of civil servants, but this has to be done on the premises of the country’s interests as a whole.

No one can deny that the pension system has indeed provided a better protection for civil servants, but given the fact life expectancy is Malaysia is rising steadily, and the number of civil servants keeps increasing, this system may not be sustainable in the long run.

The approximately RM6 billion in pension payout over a decade ago could still be handled by the government, but as the amount later soared past RM20 billion, and eventually RM30 billion, the burden has become too immense if nothing is to be done.

Will the government be still able to handle the RM120 billion pensions 16 years down the road?

Civil servants in the country can expect a pay-rise next year, meaning additional expenditure on the part of the government!

This problem is not exclusive to Malaysia, as other countries are also facing the same dilemma, including Brazil and France.

At this point of time, civil servants’ pension scheme reform is only at the stage of proposal, and the government has yet to come up with a final decision.

Veritably, this issue is of utmost importance to the country, and all quarters must sit down and talk about the scheme’s sustainability and reach a consensus for the sake of the country’s long-term interests.

No doubt, civil servants have been making significant contributions towards the country’s development while serving the Malaysian public, and the government indeed has the obligation to take care of their well-being.

That said, this has to be done on the premises of the country’s interests as a whole. This is because excessive burden will suppress the treasury and bog down the country’s development. In the end, everybody has to pay a price for this, including civil servants.

In the meantime, under the principle of lightening the government’s financial burden, the pensions for ministers and elected reps should also be removed concurrently.

After abolishing the pension scheme for civil servants, the government will then be able to offer pay-rises for civil servants in future, while the savings can be better spent on essential infrastructure and other developments.