KUALA LUMPUR (June 24): The Consumers’ Association of Penang (CAP) has urged the government to review the pension scheme for elected representatives, saying parliamentarians should have at least 48 months of reckonable service before being entitled to a lifelong pension.

"Malaysia is currently facing significant economic challenges and budget constraints, and allocating substantial funds to pensions for elected representatives diverts resources from critical areas such as healthcare, education and infrastructure development," CAP president Mohideen Abdul Kader said in a statement on Monday.

He noted that some elected representatives are eligible for multiple pensions depending on their service under different acts, ordinances or enactments. For instance, a state elected representative may receive a pension under a state ordinance while also receiving another pension under the Members of Parliament (Remuneration) Act 1980.

"It is noteworthy that while civil servants must complete 30 years of service to receive a full pension, parliamentarians are eligible for a lifelong pension after serving just 36 months. We propose that parliamentarians should serve at least 48 months of reckonable service before being entitled to a lifelong pension," said Mohideen.

"The pension scheme for parliamentarians is structured into a tiered system that provides different levels of benefits based on the duration of service. This system, designed to offer retirement benefits to MPs and ministers, grants gratuities ranging from RM1 million to RM2 million based on their years of service.

"Elected representatives already enjoy high salaries and allowances, making the additional pension benefits appear excessive. In the spirit of good governance and transparency, it is crucial that elected officials lead by example," he added.

The CAP president said reforming or abolishing multiple pensions will reinforce the public’s trust in their leaders and demonstrate a commitment to shared sacrifice and responsibility.

He went on to say that if the pension scheme is abolished, it can be replaced by a system similar to the Employees Provident Fund (EPF) or a hybrid scheme combining EPF and pension elements.

"This change would reduce the dependence on tax revenues to fund pensions, ensuring a more sustainable fiscal approach," he said.

CAP also called on the government to revise the pension payout policy for ministers and elected representatives by deferring pension payments until after the age of 60.

"This change would address the potential unfairness of individuals resuming their professional careers immediately after completing their term of office while simultaneously collecting pensions and gratuity," said Mohideen.

He said implementing such a measure would ensure a more equitable approach to pension distribution, preventing dual income streams that could be perceived as unjust by the public.