KUALA LUMPUR (July 12): Pension payments for civil service retirees for the July-December 2023 period will revert to an earlier mechanism prior to the revision in 2013, said Prime Minister Datuk Seri Anwar Ibrahim.

This comes after a Federal Court decision on June 27 to nullify the 2013 legislation, which the court found to be less favourable to pensioners.

In a statement, Anwar said the government will also study the revision of civil service salaries, adding that the study will involve civil service retirees.

Pensions and derivative pensions for the July-December 2023 period will be paid using original pension amounts, in line with the apex court decision, Anwar said in announcing the Cabinet decision.

The pension amount is derived in two parts. For civil servants who retired before 2013, the payout is reverted back to the December 2012 amount, the statement said.

For those who retired from 2013 onwards, the payment is reverted to the original amount upon retirement, it added.

The difference between the current and original payment amount will be paid in the form of special assistance termed special appreciation to retirees, the statement added.

The statement, however, did not reveal the mechanism for future payments beyond 2023.

Anwar on July 6 said the government would come up with a mechanism to protect pensioners, in response to questions on whether the government would give 10 years worth of back-pay to pensioners following the apex court’s decision, according to a Bernama report.

Anwar was also quoted as saying that overall, civil servants’ wages are still low and that an increase would be considered, according to a report by the New Strait Times.

The court ruling refers to a June 27 decision by a five-member Federal Court bench that the amendment to Sections 3 and 7 of the Pensions Adjustment (Amendment) 2013 Act (PAA), which allows a 2% increment annually, is less favourable to pensioners, and thus declared null and void.

Prior to the amendment, pension of government retirees is revised based on the prevailing salary of incumbent civil servants at that grade.

The case concerns Aminah Ahmad, a former Wisma Putra staff who retired in 2002, who brought the action in 2017, challenging the Jan 2013 amendment.