In a significant ruling today, the Court of Appeal overturned a previous High Court decision that would have mandated the government to pay out RM1.7 billion in pension arrears to over half a million retirees. The case, which began when Aminah Ahmad, a former officer at the Ministry of Foreign Affairs, and 56 other retirees sought judicial review, aimed to have their pensions adjusted according to the pre-2013 formula. This formula required that pension adjustments align with salary changes for active civil servants.
In January 2023, the High Court ruled in favor of the retirees, allowing their application and ordering the government to pay arrears totaling RM1.7 billion to 531,976 retirees. This amount was based on adjustments derived from the 2013 formula, which the retirees argued was more favorable compared to the method stated in the 2016 Service Circular.
The Court of Appeal’s unanimous decision, delivered by a three-judge panel led by Justice Azhahari Kamal Ramli, reversed the earlier ruling. The panel indicated that the issue had already been adjudicated in a 2022 Court of Appeal judgment, which had deemed the 2013 amendment to the Pension Adjustment Act, that offered a fixed 2% annual increase, to be invalid. The judges asserted that the retirees’ current application constituted res judicata—meaning the matter had already been decided—and was thus considered an abuse of the court process. They supported the government’s stance that the 2016 Service Circular represented an enhancement to the civil service scheme, not a compulsory salary revision.
Despite the specific ruling affecting only the 57 respondents in this case, the implications extend to all 531,976 retirees involved. This means the government’s obligation to pay RM1.7 billion in pension adjustments is nullified, with an average expected payout of approximately RM3,195 per retiree now off the table. The court’s conclusion also clarified that Aminah Ahmad did not sufficiently demonstrate any personal loss stemming from the 2013 amendment, and importantly, had not contested the 2022 ruling previously.
As a result of this ruling, the government will not be required to make adjustments to pensions pursuant to the 2016 Service Circular, as the court classified it as an enhancement measure rather than a salary adjustment.
In the wake of the decision, lawyers representing the retirees have stated their intention to seek leave to appeal the Court of Appeal’s ruling at the Federal Court, indicating that legal battles may continue. The government was represented in this matter by Federal Counsel Sallehuddin Ali.
