PENSIONS ACT 1980

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 227 PENSIONS ACT 1980 As at 15 December 2024 This text is ONLY AN UPDATED TEXT of the Pensions Act 1980 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT. 2 PENSIONS ACT 1980 Date of Royal Assent … … … … … … 11 February 1980 Date of Publication in the Gazette … … … … 28 February 1980 Latest amendment made by Act A1409 which came into operation on … … … … … … … 1 January 2012 PREVIOUS REPRINTS First Reprint … … … 2001 Second Reprint … … … 2002 Third Reprint … … … 2006 3 LAWS OF MALAYSIA Act 227 PENSIONS ACT 1980 ARRANGEMENT OF SECTIONS Section 1. Short title, commencement and application 2. Interpretation 3. Pension, etc., not an absolute right 4. Pension, etc., to be charged on the Federal Consolidated Fund 5. Regulations 6. Computation of pension, etc. 6A. Exercise of option 7. Conferment of pensionable status 8. Officers deemed to be pensionable officers 9. Grant of pension, etc. 10. Compulsory retirement 11. Retirement at the instance of the Government 12. Optional retirement 12A. Retirement on being appointed to serve in organization 12B. Monthly contributions to the Consolidated Fund 13. Retirement in the public interest 14. A derivative pension or gratuity where an officer dies in service 15. Derivative pension where an officer dies after retirement 16. Cessation of derivative pension 4 Laws of Malaysia ACT 227 Section 16A. Cessation of pension in respect of child attaining age of eighteen deemed valid 17. Disability pension 18. Dependant’s pension 19. Pension, etc., not to be assignable 20. (Deleted) 21. Pension, etc., to cease on conviction 21A. Pension, etc., to cease on acquiring citizenship of other country 22. Maximum pension 22A. Lowest pension for full service 23. Suspension of pension 24. Grant of retiring allowance to temporary officer 25. Grant of derivative retiring allowance to temporary officer 25A. (Deleted) 26. Payment without probate or letters of administration 26A. Payment of reward for information 27. Amendment of Schedule 28. Repeal and savings SCHEDULE 5 LAWS OF MALAYSIA Act 227 PENSIONS ACT 1980 An Act to provide for the administration of pensions, gratuities and other benefits for officers in the public service and their dependants. [1 January 1976] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: Short title, commencement and application 1. (1) This Act may be cited as the Pensions Act 1980 and shall be deemed to have come into force on 1 January 1976. (2) This Act shall apply throughout Malaysia in respect of— (a) officers in the public service who have opted or who are deemed to have opted for any New Scheme; (b) officers in the public service who were or are appointed under any New Scheme; (c) officers in the public service who by virtue of their option are bound by any New Scheme; or (d) temporary officers in the public service who were appointed prior to 1 January 1976 and who were not given the option to opt for that New Scheme which came into force from that date. 6 Laws of Malaysia ACT 227 Interpretation 2. In this Act, unless the context otherwise requires— “child” means a child of a deceased officer— (a) who is a child under twenty-one years of age and includes— (i) a posthumous child, a dependent step-child and an illegitimate child of the officer; and (ii) a child adopted by the officer under any written law relating to adoption or under any custom or usage, on satisfactory proof of such adoption; and (b) who is a child of any age and is mentally retarded or physically and permanently incapacitated and is incapable of supporting himself provided that such child is mentally retarded or physically and permanently incapacitated before the child reaches the age of twenty-one years; “Director General” means the Director General of Public Services; “federal officer” means an officer in the service of the Federal Government; “last drawn salary” means the last drawn monthly substantive salary or in the case of retirement under section 12 A his actual last drawn monthly substantive salary paid to him by the organization whilst on the same terms and conditions of service as in the New Scheme, and includes any pensionable allowance; “local federal officer” means an officer who is recruited for, or transferred to, service under the Federal Government in Sabah or Sarawak and has not been permanently transferred to service outside Sabah or Sarawak; Pensions 7 “New Scheme” means the revised salaries and terms and conditions of service of officers in the public service arising from the revision of salaries and terms and conditions of service of such officers made by the Federal Government with effect from 1 January 1976, or from any other subsequent revision made by the Federal Government from time to time; “officer” means an officer on full-time employment in the public service; “other public service” means service under a Government set out in the Schedule in respect of officers transferred to public service; “pensionable officer” means an officer who has been conferred the status of a pensionable officer under section 7 or who is deemed to be a pensionable officer under subsection 6A (6C) or section 8; “public service” means— (a) the Judicial and Legal Service; (b) the General Public Service of the Federal Government; (c) the Police Force; (d) the Railway Service; (e) the Education Service; (f) the Joint Public Services common to the Federal Government and of one or more of the States; (g) the Public Service of each State; (h) the Parliamentary Service; or (i) such other service as the Yang di-Pertuan Agong may determine to be public service for the purposes of this Act; 8 Laws of Malaysia ACT 227 “reckonable service” means service prescribed as reckonable service under the regulations; “regulations” means any regulations made under section 5; “state officer” means an officer in the service of the Government of a State; and “Statutory or Local Authority” means a Statutory or a Local Authority established by any written law. Pension, etc., not an absolute right 3. (1) No officer shall have an absolute right to compensation for past service or to any pension, gratuity or other benefit under this Act. (2) Where the Yang di-Pertuan Agong is satisfied that an officer has been guilty of negligence, irregularity or misconduct, the Yang di-Pertuan Agong may reduce or withhold a pension, gratuity or other benefit for which the officer would have been eligible but for the provision of this section. Pension, etc., to be charged on the Federal Consolidated Fund 4. (1) Pension, gratuity or other benefit granted under this Act or regulations made thereunder shall be charged on the Federal Consolidated Fund. (2) For the purposes of this Act, pension, gratuity or other benefit does not include any cash award granted in lieu of accumulated vacation leave to an officer whose salary is not paid out of the Federal Consolidated Fund. Regulations 5. (1) The Yang di-Pertuan Agong may make regulations for the purposes of this Act. Pensions 9 (2) Notwithstanding any other written law, regulations made under this section may be given retrospective effect to a date earlier than the commencement of this Act in order to confer a benefit upon, or remove a disability attaching to, any person. Computation of pension, etc. 6. (1) Any pension, gratuity or other benefit granted under this Act shall be computed in accordance with the regulations; provided that, in the case of retirement under paragraph 10(5)(a) or under section 12A, the amount of pension granted shall not be less than one-fifth of the officer's last drawn salary. (2) For the purpose of subsection (1), an officer who retires before being confirmed in his second or subsequent appointment, the last drawn salary shall be the last drawn salary of his former appointment in which he had been confirmed had he remained in his former appointment until his retirement. (3) Any pension, gratuity or other benefit granted to an officer who retires under section 11 shall be computed in accordance with the regulations where the total period of his reckonable service shall be counted as if he had served until his compulsory age of retirement, whichever is applicable to him. Exercise of option 6A. (1) An officer appointed on or after the commencement of this section shall, before being confirmed in his appointment, be entitled to opt for the Employees Provident Fund Scheme. (2) The option under subsection (1) shall be made to the appropriate appointing authority in such manner as may be determined by the Director General. 10 Laws of Malaysia ACT 227 (3) The exercise of the option by an officer under this section shall take effect on his being confirmed in his appointment and shall thereupon be irrevocable. (4) Where an officer opts for the Employees Provident Fund Scheme, the provisions of this Act, except this section, shall not apply to such officer. (5) An officer who opts for the Employees Provident Fund Scheme shall retire from the public service on attaining the age of sixty years. (5A) Subsection (5) shall not apply to an officer who was appointed before 1 January 2012 and had been given an option before such date and had not opted for the compulsory age of retirement of sixty years. (5B) The compulsory retirement age for an officer who had not opted for the compulsory retirement age of sixty years as referred to in subsection (5A) shall remain either fifty-five years or fifty-six years or fifty-eight years as the age that he had opted before 1 January 2012. (5C) The option for the compulsory age of retirement of sixty years exercised by an officer for the purpose of subsections (5) and (5A) shall be irrevocable. (6) The Yang di-Pertuan Agong, in the case of a federal officer or a local federal officer, or the State Authority, in the case of a state officer, may require an officer who opts for the Employees Provident Fund Scheme to retire from the public service in any of the circumstances referred to in paragraphs 10(5)(a), (b), (c), (d), (e) and (f) or section 11. (6A) Notwithstanding subsection (3), an officer who had opted for the Employees Provident Fund Scheme before 1 January 2009 and has been confirmed in his appointment before such date shall be given an option to opt for pension, gratuity or other benefit granted under this Act. Pensions 11 (6B) The option made under subsection (6 A) shall be irrevocable on 1 February 2009 and the provisions of this Act shall apply to the officer from that date. (6C) Where an officer has opted for pension, gratuity or other benefit pursuant to subsection (6A) and dies before the option becomes irrevocable pursuant to subsection (6B), the officer is deemed to be a pensionable officer and the provisions of this Act shall apply to him from the date of his death. (7) In this section “Employees Provident Fund Scheme” refers to a provident fund established under the Employees Provident Fund Act 1991 [Act 452], including an approved fund as defined in that Act. Conferment of pensionable status 7. A permanent officer may be conferred the status of a pensionable officer if he has— (a) been confirmed in his present appointment; and (b) completed not less than three years’ reckonable service. Officers deemed to be pensionable officers 8. Without prejudice to section 7, the following officers shall be deemed to be pensionable officers: (a) an officer who has already been emplaced or qualified to be emplaced on the pensionable establishment under the Pensions Or