LETTER | From Feb 1, new recruits into the country’s civil service will have to say goodbye to the pension system.
Alternatively, they will be placed on a contract system of employment with contributions to the Employees Provident Fund (EPF).
The contract system of employment by placing civil servants on a fixed term will scrutinise their progress on the basis of performance.
I understand that the civil servants already under the pension scheme will continue in the same scheme.
The placement of new recruits into the civil service would not affect the 900,000 former civil service employees.
The civil service in the country comprising about 1.7 million is one most bloated civil services in the world.
The announcement of the civil service reforms is nothing new.
Proposals for reforms have been in the air for a long time. It is just that the past governments did not have the political will to introduce the changes.
While the complete proposal of the changes is not clear, but the new recruits to the civil service will not be placed on the pension system.
Legal, constitutional problems
Paying pensions to nearly 900,000 former civil servants and former politicians poses a huge financial burden to the government.
More than this, some former civil servants and politicians enjoy multiple pensions.
There are already suggestions for them to opt for one pension and not multiple pensions.
While the new scheme for the fresh recruits might not be a problem, but cutting down on multiple pensions might pose legal and constitutional problems.
The multiple pensions system is very much embedded in the system and protected by the laws. It would be difficult how the government is going to, from a constitutional perspective, reduce multiple pensions to one.
The government with a parliamentary majority and the ground swell against the provision of multiple pensions might be able to reduce these multiple options into one.
There are no two ways about it to reform the civil service. The public sector needs reforms badly. Reforming the pension system might be the way to start.
An alternative system to pensions must not only reduce the financial burden of the government, I mean the taxpayers’ money, but the new system replacing the old must have inbuilt mechanisms to improve the performance of the service.
The real challenge is whether the government can co-opt the existing civil servants who are on pensions into an alternative system.
Bastion of Malay political power
Tampering with the civil service might not be an easy thing.
As it is, Prime Minister Anwar Ibrahim has been accused of trying to weaken the Malay political base by tampering with the civil service.
Unlike other countries, the civil service in Malaysia is seen as a bastion of Malay political power where there exists a close nexus between the Malay political and the administrative elites.
This nexus is considered essential for the socio-economic upliftment of the bumiputera community.
Moreover, in the charged ethnic environment, the civil service is looked upon by the Malays as a counterbalance to the non-Malay domination of the private sector.
This is the reason why civil service reforms were talked about in the past, but there was no political will to implement them.
Anwar might give the impression that he has finally seized the bull by its horns by trying to end the pensions for new civil service hires.
But reforms would not make sense if the existing civil servants were still on the pensions system.
Maybe, Anwar or the government is not revealing the full details of the reforms in the public sector.
Anwar might think that by going for the low hanging fruits, the reforms could be gradually introduced over some time.
But as Anwar knows very well tampering with the Malay-dominated civil service can be explosive and politically suicidal.
It must be remembered that 80 percent of the civil servants are not sympathetic to the present government.
The writer is former Penang deputy chief minister II.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.