TRAILING a series of hot button issues, the pension scheme has taken centre stage after the prime minister called for it to be reviewed due to its being increasingly difficult to sustain over time.

Dr Mahathir Mohamad rightly pointed out that the pension payments were increasing, almost hitting RM28 billion, or nearly 9% of the national budget of RM 314.5 billion. The payments will increase with a larger civil service and higher life expectancy.

How did we get here?

Well, the law governing pensions was introduced in 1951 by the British, and has remained largely unchanged since the Pensions Act 1980.

Since then, numerous changes have occurred in the civil service itself, with many large government bodies privatised-including the all the utilities- water, electricity and telecommunications, statutory bodies like airports and ports, highway and road authorities, the Income Tax Department, government-owned banks, the postal service and even the retirement funds themselves, such as EPF.

It shifted the burden of pensions and post-retirement healthcare to the private sector and private insurers, potentially saving the government billions.

Even after a series of privatisations, the civil service has managed to remain rather large.

This has kept up the strain on government coffers . In an effort to reduce it, KWAP was incorporated in 2007. With R 140 billion in assets, it should play an increased role in helping to offset the government’s commitment to pensioners.

If the Armed Forces Fund is able to manage its funds well enough to pay out impressive returns year on year, and the EPF can grow to become one of the biggest pension funds in Asia, KWAP should balance out its portfolio and look outwards to gain better yields to assist the government. The government could help by allowing KWAP instead of EPF to manage all the government servant accounts.

Government servants in general are paid far lower wages than their private counterparts. This is more apparent in the high-demand professions such as accountancy, law and medicine. The workers filling these positions are often also far more overworked compared to their peers outside the civil service. An average government doctor sees thrice as many or more patients in a day, and deputy public prosecutors have an unenviable number of case files to handle.

The joy of serving your country is great, but it does not pay the bills.

We need to even the gap between the private and public sectors. The policymakers and enforcers and those bound by those policies need to be on equal professional footing, and it is only fair that they receive similar compensation for it.

The focus of the civil service should be on these groups.

As it should be with areas like security, safety, public defence and infrastructure development.

As for the non-critical ones, such as branches of various ministries for information collection and dissemination, promotion and propaganda and just pure administrative matters, can be collapsed into one another, removing overlaps and allowing better focus on their roles. For example, a unified information technology centre for all government agencies. Non-essential roles should be on a contract-basis or outsourced.

Some roles can be assigned to the local governments, in itself reflective microcosms of the larger state and federal governments complete with offices for health, safety, public order, infrastructure and even tourism and public relations.

The state governments could be granted more autonomy and funds for this, and perhaps the overlaps between the service commissions can be streamlined – other than the Armed Forces Council, Judicial and Legal Service Commission and Police Service Commission, there should be just one body overseeing the various government agencies. Government-related talent agencies like TalentCorp or HRDF should also be consulted in the hiring of personnel. Apart from compensation, the behemoth needs to be made more flexible. It has to be dynamic and energetic to attract the best.

Mobility between private and public sectors should also be improved. The public sector can benefit from a customer-oriented and cost-conscious private employee and the private sector can benefit from a people-centric and balanced work culture.

Brimming with potential for synergy and increased productivity, this could bridge the economic divide, push wages up, and even improve race relations, in a country that could do with a stimulus in these areas. – September 11, 2019.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.