This article first appeared in The Edge Malaysia Weekly on July 6, 2026 - July 12, 2026

2018: Putrajaya withdraws RM4.5 billion from Retirement Fund Inc (KWAP) — its first such drawdown since the fund’s incorporation as a statutory body on March 1, 2007 — to help pay its pension bill of RM25.18 billion in 2018.

September 2019: Public Service Department (JPA) director-general Borhan Dolah tells reporters that a special public service reform committee meeting held in October 2018 had decided that civil servants hired from 2020 onwards would no longer receive a pension but be placed under an improved contractual scheme with better pay and higher allowances. Targeted savings under the new scheme is reportedly RM5 billion a year.

Oct 22, 2019: Prime Minister Tun Dr Mahathir Mohamad tells parliament that the government is studying several mechanisms aimed at easing the fiscal burden without short-changing civil servants. He assures civil servants that their pension benefits remain protected under Article 147 of the Federal Constitution. Article 147(1) reads: ‘The law applicable to any pension, gratuity or other like allowance granted to a member of any of the public services, or to his widow, children, dependant or personal representatives, shall be that in force on the relevant day or any later law not less favourable to the person to whom the award is made.’

Feb 24, 2020: Dr Mahathir resigns as prime minister and dissolves the cabinet after the ‘Sheraton Move’ ends the Pakatan Harapan coalition’s first stint in power

March 2020 to May 2023: During the Covid-19 pandemic, Malaysia imposes three Movement Control Orders between March 2020 and 2021 before transitioning to the endemic phase. The World Health Organization declares the pandemic over on May 5, 2023.

July 12, 2023: The cabinet decides that new civil servants hired for permanent positions will be under contract pending the completion of a new remuneration scheme

October 2023: The Fiscal Outlook 2024 report says the government is considering a shift to a defined-contribution (DC) scheme, as pension commitments are expected to rise further

Jan 15, 2024: JPA director-general Wan Ahmad Dahlan Abdul Aziz announces in a circular that new civil service appointments will be on a contractual basis from Feb 1, 2024, following the cabinet’s decision on July 12, 2023

Jan 24, 2024: Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi says Putrajaya’s pension bill will reach RM120 billion by 2040 if the existing hiring policy continues. He announces a new scheme requiring all new civil service hires to contribute to retirement schemes such as the Employees Provident Fund (EPF) and the Social Security Organisation (Perkeso)

Feb 1, 2024: New civil service entrants are no longer pensionable and are hired on three-year contracts, pending the formalisation of a permanent contributory appointment scheme

Feb 18, 2025: In a written reply, Minister in the Prime Minister’s Department Zalifa Mustafa tells parliament that the government’s pension bill is expected to reach RM46.36 billion by 2030, and that the new civil service retirement scheme is still being studied

June 26, 2026: Prime Minister Datuk Seri Anwar Ibrahim says the government is fine-tuning a new ‘contributory permanent appointment’ scheme for civil servants, as pension payments are expected to reach RM46.36 billion in 2030 versus RM37.4 billion in 2025. Anwar says improvements to the public service salary structure under the Public Service Remuneration Scheme entail an additional financial implication of RM18.91 billion, without specifying the time frame.

Jan 31, 2027: The first batch of civil servants hired after Feb 1, 2024, reach the end of their three-year contracts, subject to extension or transition to a new permanent contributory system
 

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