FAQs on the upcoming Public Service Remuneration System in Malaysia

With the new system set to take effect in December, the Public Service Department has shared details on whether the mandatory retirement age changes if officers opt in for the system, eligibility for pension, and more.

Ahead of the upcoming implementation of the Public Service Remuneration System in Malaysia come December, Malaysia's Public Service Department has a series of frequently asked questions and responses around salary and pension adjustments and more.

HRO has compiled a list of these, as follows:

Q Does the mandatory retirement age change if I choose this SSPA? 

The mandatory retirement age will remain the same even if one chooses the SSPA. If the last chosen age was 58, it will remain at that age. If it is 60, it will remain at the age of 60. No changes. 

Q Will the formula for calculating retirement benefits such as service article, monthly pension and GCR cash award change if I choose this SSPA? 

No. The calculation formula remains the same as before. There is no amendment to the Pension Act 1980 either. In this SSPA circular, there is no mention of any change or amendment to the retirement benefit calculation formula.

This means that there is no new formula that reduces or increases the amount of retirement benefits. Just the same. Therefore, as long as there is no amendment to the Pension Act 1980, then the same applies. 

Q Is it true that if I choose this SSPA, I will get a pension at the age of 60. If I choose to retire at the age of 55, do I have to wait until I turn 60? If 30 years of 'service' is enough, can I get it early? 

No. The eligibility of officers to receive pension is still the same principle as before. Officers appointed on or after 12 April 1991, if they retire by choice, the earliest they can receive a pension is at the age of 55. 

Although officers choose a mandatory retirement age of 56/58/60 years.

For officers appointed after 1 January 2012, although the mandatory retirement age is 60 years, you can also receive a monthly pension as early as the age of 55 if you choose to retire before the age of 60.

Q Now that I am a pension scheme, if I choose SSPA, will I automatically become an KWSP scheme? 

Still pension scheme. In SSPA, it is not stated that you will directly enter the EPF scheme should you choose SSPA. 

Q I am already retired, but the SSPA does not talk about retirees?

This SSPA is for officers who are still in service. Those that who are already retired do not need to sign for the option. 

As for pension adjustments, JPA and KWAP will calculate and make pension adjustments for December 2024 (8%) and January 2026 (7%) pensions. 

Q What are the advantages of choosing SSPA from the point of view of a retiree?

The retirement benefits will be higher because if you choose SSPA, you will be given a salary adjustment. The calculation of retirement benefits such as service reward, monthly pension and GCR cash reward will be calculated based on one's final salary. 

Therefore, the final salary that will be taken into account later is the final salary after adjustment if you choose SSPA.

Q Which is better, SSPA or SSM? 

Choose SSPA for better and more prosperous retirement benefits. 

READ MORE: Civil servants who opt for Malaysia's Public Service Remuneration System to receive salary and pension adjustments: JPA 

Lead image / JPA Facebook