Govt to foot some RM120bil in pension payments if new salary scheme not introduced, says Zahid

KAJANG: The government has to spend some RM120bil to cover pension payments by 2040 if new salary schemes in hiring public officers are not introduced, says Datuk Seri Dr Ahmad Zahid Hamidi.

The Deputy Prime Minister said the new salary scheme is expected to be announced by the Public Service Department director-general within this year.

"At the Cabinet meeting, we discussed that there is a confusion in terms of the salary scheme.

"The contract for the service system will be done in the interim period before the new salary scheme is introduced," he told reporters after his working visit to the Civil Defence Force's headquarters on Wednesday (Jan 24).

While the new salary scheme has not been introduced, Ahmad Zahid said it will only be applicable to new hirings, and not existing ones.

"Existing employment, who opt for the pension scheme, still remains as such," he said.

Previously, it was reported that a study on the salary system for public officers is being completed while the contract appointment system for new recruitment in the civil service is temporary.

Communications Minister Fahmi Fadzil said a detailed explanation would be issued soon by the Public Service Department on the matter.

Public Service Department director-general Datuk Seri Wan Ahmad Dahlan Abdul Aziz, in a circular, said that the contract of service system would take effect from Feb 1.

He said the law was still being amended to allow for the creation of a new civil service recruitment method and that the new recruitment method, once implemented, would reduce the country’s fiscal burden.