Putrajaya spent RM24b on retirement benefits to civil servants in 2018, vs RM6b in 2006

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KUALA LUMPUR (Oct 22): The government spent RM23.87 billion on civil servants retirement benefits in 2018, up four times from RM5.86 billion in 2006, according to Prime Minister Tun Dr Mahathir Mohamad.

Dr Mahathir said the government is facing challenges to pay the increasing amount of retirement benefits every year.

"In addition, the previous government has increased civil service salary a few times at a relatively high percentage, which increases the government's pension liabilities together," he told Dewan Rakyat today.

"To handle this issue, the government is studying several new mechanisms. We hope the new mechanism will not burden the government while civil servants will not face any losses after they end their service," he said.

Dr Mahathir was responding to Datuk Seri Dr Ismail Mohamed Said [BN-Kuala Krau], who asked the government to state the current status of the proposal to implement an improved contractual scheme to replace the permanent and pension scheme for appointments in the public service.

In a follow-up question, Khairy Jamaluddin [BN-Rembau] requested the government to provide an assurance that the new mechanism will not affect the existing civil servants' pension.

Dr Mahathir said the government will adhere to all employment contracts signed with existing civil servants.

"When they enter civil service, the government enters into an employment agreement with them, the government will adhere to the terms stated in the agreement for existing civil servants," he said.