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Discontinuation of The Reduction Of Fixed Deposit Placement Based On Property Purchase And MM2H Approval By Government Pension
Kindly be informed that MM2H Centre has discontinued the reduction of Fixed Deposit placement based on property purchase worth RM1 million and above in Malaysia. Also discontinued is the MM2H...
What's in store from Jan 1 for pensioners Print E-mail
Sunday, 04 January 2009 14:16

THREE pensions and remunerations amendment bills were passed by Parliament last month. Among the main benefits pensioners can look forward to from last Thursday are:

- Pensions calculations now factor in a maximum 30 years of service, up five years from 25 years' service.

This means that the maximum pension moves from 50 per cent previously to 60 per cent of the basic salary.

Pensioners who have served 30 years in the civil service can expect a 20 per cent increase on what they are getting now.

- No more reductions on a derivative pension after 121/2 years of retirement. Widows to get the full pension.

When a pensioner who has been retired more than 121/2 years dies, his spouse usually gets only 70 per cent of the derivative pension.

The logic of this was that, if a full pension is enough for two people, then, if there is only one person left, that person needs less money on which to survive.

However, with this amendment, the surviving spouse gets the full sum.

(About 38,000 widows stand to gain from the confluence of these two policies)

Because their deceased spouse has served at least 30 years, and because the pension will be restored to 100 per cent, these specific spouses stand to get a maximum increase of 71.4 per cent on what they are currently getting.

- Removal of residency requirement. Pensioners living overseas will no longer have to return to Malaysia on a regular basis to be eligible for pension.

If only Janet Shaxson, the widow of Brig-Gen (Rtd) Victor Nelson Stevenson, could have lived to see this.

Before this amendment, any pensioner or widow of a pensioner could not reside outside of the country for more than 180 days at a stretch without risking losing his or her rights to a pension.

With this amendment, a pensioner can reside overseas and still get his or her pension, without having to return to Malaysia regularly.

This is because the pension is now recognised as a deferred salary which is owed to the pensioner, whether or not he is residing in Malaysia.

Post-Service Division director Datuk Yeow Chin Kiong said this amendment would free elderly, ill or destitute pensioners to live with relatives overseas.

"Before this, the widow might refuse to go and live with her son or daughter overseas, because she doesn't want to lose the pension, the only thing her husband left her. So, she lives alone and depends on help from neighbours. Now, she can go and live with family who will really look after her."

The reason that pensions were not given to pensioners who resided overseas was to check the outflow of money.

But, with globalisation, this was not such a big concern anymore, said Yeow, especially as money also flowed into Malaysia, brought in by foreign pensioners who came here on the Malaysia My Second Home programme.

There are 1,475 pensioners living in 24 countries. The estimated outflow for this is RM31 million. But this figure is small compared with the RM7.1 billion in total retirement benefits given out.

Shaxson, a Malaysian citizen, lost her husband's pension because she had gone to England to nurse a sick relative. While there, she became bedridden with cancer.

As a result, she inadvertently broke the residency requirement and the Armed Forces Veteran's Affairs Department of the Defence Ministry stripped her of her derivative pension.

She died on Nov 29, aged 73, without getting her husband's pension over a technicality despite him having served the armed forces for nearly 32 years.

- Pensioners who have served a minimum of 25 years' service will receive a minimum pension of RM720.

This is to serve 15,000 to 20,000 pensioners, who retired at least 20 years ago on a short salary scale.

Because of the short salary scale, these pensioners, who were largely cooks or labourers, have never had their pensions catch up with that of other pensioners, despite the many adjustments over the years.

On average, the pensioners in this group receive about RM400 a month. The RM720 minimum is expected to take them over the official poverty line.

- Parents of deceased single civil servants will receive a lump sum ex gratia.

Up till now, if a civil servant dies leaving no widow or children, the government does not pay a pension to his parents.

However, with this amendment, any mother or father who has lost an unmarried child who was serving in the civil service will be given an ex-gratia payment.

In actuality, this is the gratuity that the deceased would have received had he lived, although it is called "ex gratia". The sum will be calculated based on the deceased's last-drawn salary and up to the mandatory age of retirement that the civil servant could have been reasonably expected to have served if he had not died.

Any parent of this category of person, who is still alive as at Jan 1, 2009, is eligible to receive this ex-gratia payment.



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