Statutory and Local Authorities Pensions Act 1980

This Act shall apply throughout Malaysia in respect of employees in the statutory and local authorities—

Where it is established to the satisfaction of the Minister by an appropriate authority that an employee has been guilty of negligence, irregularity or misconduct, the Minister may reduce or withhold the pension, gratuity or other benefit for which such employee would be eligible but for this section.

8 Laws Of Malaysia ACT 239

Payment of any pension, gratuity or other benefit granted under this Act up to 31 December 1980 shall be made from the Fund established under the Statutory and Local Authorities Superannuation

Fund Act 1977 [Act 185].

For the purpose of subsection (1), the last drawn salary of an employee who retires before being confirmed in his second or subsequent appointment 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.

Any pension, gratuity or other benefit granted to an employee 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.

been confirmed in his present appointment; and

completed not less than three years’ reckonable service.

Statutory and Local Authorities Pensions 9

The option under subsection (1) shall be made to the appropriate appointing authority in such manner as may be determined by the pensions authority.

The exercise of the option by an employee under this section shall take effect on his being confirmed in his appointment and shall thereupon be irrevocable.

Where an employee opts for the Employees Provident Fund

Scheme, the provisions of this Act, except this section and section 26, shall not apply to such employee.

An employee who opts for the Employees Provident Fund

Scheme shall retire from the service of a statutory or local authority on attaining the age of sixty years.

Subsection (5) shall not apply to an employee 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.

The compulsory retirement age for an employee who had not opted for the compulsory retirement age of sixty years 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.

The option for the compulsory age of retirement of sixty years exercised by an employee for the purpose of subsections (5) and (5A)

shall be irrevocable.

An appropriate authority may, with the consent of the pensions authority, require an employee who opts for the Employees Provident

Fund Scheme to retire from the service of a statutory or local authority

10 Laws Of Malaysia ACT 239

in any circumstances referred to in paragraphs 10(5)(a), (b), (c), (d),

Notwithstanding subsection (3), an employee 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.

The option made under subsection (6A) shall be irrevocable on 1 February 2009 and the provisions of this Act shall apply to the employee from that date.

Where an employee has opted for pension, gratuity or other benefit pursuant to subsection (6A) and dies before the option becomes irrevocable pursuant to subsection (6B), the employee is deemed to be a pensionable employee and the provisions of this Act shall apply to him from the date of his death.

(Deleted by Act A904).

Pensionable employee may opt for the Employees Provident Fund

who has been conferred the status of a pensionable employee under section 6 or is deemed to be a pensionable employee under paragraph 7(a), (b) or (c); or

who was appointed before 12 April 1991 and has not been conferred the status of a pensionable employee, may opt for the Employees Provident Fund Scheme.

The option under subsection (1) shall be made to the appropriate appointing authority in such manner as may be approved by the pensions authority.

Statutory and Local Authorities Pensions 11

The exercise of the option by an employee under this section shall take effect on the option being accepted by the appropriate appointing authority and shall thereupon be irrevocable.

A pensionable employee shall cease to be a pensionable employee upon his option taking effect.

Subject to subsection (6), the provisions of this Act, and in particular subsection 8(1), shall cease to apply to a pensionable employee upon his option taking effect.

Subsections 6A(5) and (6) and sections 6C and 6D shall apply to an employee who opts for the Employees Provident Fund Scheme under this section.

The option under subsection (1) shall be made to the appropriate appointing authority in such manner as may be approved by the pensions authority.

The exercise of the option by an employee under this section shall take effect on the option being accepted by the appropriate appointing authority and shall thereupon be irrevocable.

A pensionable employee shall continue to be a pensionable employee upon his option taking effect, but his service after his option takes effect shall not be taken into account for the purpose of computing his reckonable service.

For the purposes of this Act, where a pensionable employee opts for the Pension And Employees Provident Fund Scheme under subsection 6E(1), he may, upon his retirement under section 10, 11, 12

or 13 from the service of the statutory or local authority, be granted a pension, gratuity or other benefit based on his reckonable service in the statutory or local authority, computed in accordance with the regulations.

Statutory and Local Authorities Pensions 13

Where a pensionable employee who opts for the Pension And

Employees Provident Fund Scheme under subsection 6E(1)—

an employee who has already been emplaced or qualified to be emplaced on the pensionable establishment under the

Statutory and Local Authorities Superannuation Fund Act 1977 prior to 1 July 1977 in the case of an employee in

Peninsular Malaysia or 1 July 1978 in the case of an employee in Sabah or Sarawak;

an employee who has been conferred the status of a pensionable employee by the appropriate authority before the publication of this Act;

a pensionable officer under the Pensions Act 1980 [Act 227]

or any other written law and who is permanently transferred by appointment to a statutory or local authority; and

a permanent and confirmed employee who dies in service, retires on medical grounds or under section 13 before completing ten years’ reckonable service:

Provided that where an employee has been found to have been wrongly conferred the status of a pensionable employee by the appropriate authority, the pensions authority may direct the appropriate

14 Laws Of Malaysia ACT 239

authority to revoke such conferment and thereafter the pensions authority shall be responsible for the conferment of pensionable status on the employee under section 6.

The organization to which a pensionable employee is appointed by or with the approval of the Government under subsection 13(2) shall make monthly contributions to the Pensions Trust Fund established under the Pensions Trust Fund Act 1991 at the rate of seventeen and half per centum of such employee’s monthly salary in respect of each pensionable employee whilst he is on the same terms and conditions of service as in the New Scheme.

Notwithstanding subsection (1), all monthly contributions by an employer up to 31 December 1980 shall be paid into the Fund established under the Statutory and Local Authorities Superannuation

Fund Act 1977 and upon the winding up of the Fund, all the contributions and income thereof, less any payments made in respect of pensions, gratuities or benefits granted under this Act, shall be transferred to the Consolidated Fund.

Notwithstanding subsection (1), all contributions made by an employer in respect of each pensionable employee at the rate set out in the Second Schedule of the Statutory and Local Authorities

Superannuation Fund Act 1977 up to 31 December 1980 shall be deemed to have been properly made.

Where the amount of monthly contributions which an employer is liable to pay in respect of all pensionable employees is not paid within the period prescribed in the regulations, the employer shall be liable to pay interest on such amount at the rate of half per centum in respect of each month or part of a month after the expiration of such

Statutory and Local Authorities Pensions 15

period during which such amount remains unpaid except that interest shall only be collected for arrears incurred after 1 January 1981.

The Minister may, with the concurrence of the Minister of

Finance, by order amend the rate under subsections (1) and (4).

The Minister of Finance may exempt interest which is liable to be paid under subsection (4) by the employer if he is satisfied that the delay is not due to a wilful act or is due to an act which is beyond the control of the employer.

compulsory retirement under section 10;

retirement under section 11; or

optional retirement under section 12 after completing a period of not less than ten years’ reckonable service.

(Deleted by Act A619).

A pensionable employee may be granted a pension, gratuity or other benefit if the retirement is under section 13.

(Deleted by Act A1125).

Where an employee attains the compulsory retirement age of fifty-five, fifty-six, fifty-eight or sixty years, as the case may be, and a

16 Laws Of Malaysia ACT 239

criminal or disciplinary proceeding which may result in his conviction or dismissal is not concluded, his service shall be deemed to have been extended beyond any of that age, as the case may be, but on no-pay leave until his case is determined.

Where the criminal or disciplinary proceeding under subsection (3) does not result in his conviction or dismissal, he shall retire on attaining the age of fifty-five, fifty-six, fifty-eight or sixty years, as the case may be of his compulsory age of retirement, and the period of service after any of this age, as the case may be, shall not be regarded as reckonable service.

An appropriate authority may, with the consent of the pensions authority, require any employee to retire from service in a statutory or local authority—

Paragraph (5)(f) shall apply only to employees appointed to the service of a statutory or local authority after the commencement of this subsection.

The compulsory age of retirement of sixty years provided for in subsection (1) shall apply to an employee who is appointed on or after 1 January 2012.

The compulsory age of retirement of sixty years provided for in subsection (1) shall not apply to an employee 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.

The option for the compulsory age of retirement of sixty years exercised by an employee referred to in subsection (8) shall be irrevocable.

18 Laws Of Malaysia ACT 239

on grounds of national interest; or

in the interest of the service of the statutory or local authority.

Where an employee who is appointed before the commencement of this section retires under subsection (1), such employee may be granted a pension only on attaining the age of—

Where an employee who is appointed after the commencement of this section retires under subsection (1), such employee may be granted a pension only on attaining the age of fifty-five years.

An employee who retires under subsection (1) may on his retirement be granted a gratuity or other benefit.

(Deleted by Act A1410).

Statutory and Local Authorities Pensions 19

Subject to section 17, where an employee who has retired under subsection (1) dies before attaining forty-five years of age, fifty years of age or fifty-five years of age, as the case may be, the Minister may forthwith grant to the person prescribed in the regulations a derivative pension of not less than one-fifth of the deceased employee’s last drawn salary and a derivative gratuity or a derivative gratuity only.

(Deleted by Act A1344).

Where a pensionable employee who is below the age of forty-five years in the case of a female employee and fifty years in the case of a male employee is appointed by or with the approval of the

Government to serve in any organization on or after 17 March 1986 on the same terms and conditions of service as in the New Scheme he may be granted a pension, gratuity or other benefit on attaining the age of sixty years if he has served in such organization or any of its subsidiaries for a continuous period of not less than five years from the date of his leaving the service of the statutory or local authority, and in such case, any period of such service under the same terms and

20 Laws Of Malaysia ACT 239

conditions of service as in the New Scheme with the organization or any of its subsidiaries may be reckoned for the purpose of granting the pension, gratuity or other benefit to the employee.

Where an employee referred to in subsection (2) who was appointed before 1 January 2012 had been given an option before such date and had not opted for the compulsory age of retirement of sixty years, subsection (2) shall apply to him with the words ‘fifty-five’ or

‘fifty-six’ or ‘fifty-eight’, as the case may be, being substituted for the word ‘sixty’.

In the case of a pensionable employee to whom subsection (2)

does not apply, he may be granted a pension, gratuity or other benefit on attaining the age of forty-five years in the case of a female employee or fifty years in the case of a male employee if he has served in the organization or any of its subsidiaries or the international organization to which he was appointed by or with the approval of the Government for a continuous period of not less than five years from the date of his leaving the service of the statutory or local authority or until the age of forty-five years or fifty years, as the case may be, whichever is the earlier.

Notwithstanding the provisions of subsections (2) and (3) where the service of the employee is terminated by the organization or any of its subsidiaries or the international organization to which he was appointed by or with the approval of the Government on grounds of retrenchment or ill health, or where the contract is not renewed in respect of his appointment in the international organization, he may be granted a pension, gratuity or other benefit.

(Deleted by Act A1344).

(Deleted by Act A1344).

where a pensionable employee dies within or after twenty years from the date of his retirement the Minister may grant to the person prescribed in the regulations a derivative pension equivalent to the amount of pension paid to him:

Provided that any grant of derivative pension after the expiration of the period of twenty years from the date of his retirement shall only be made where the recipient—

in the case of a widow or widower, was married to the deceased employee while the employee was still in service;

Where a pensionable employee dies after his retirement but during the period of retirement prior to his death his pension was not granted or has ceased under section 23, subsection (1) shall apply and for this purpose the employee shall be deemed to have received the pension.

(Deleted by Act A1172);

a child, other than a child who is mentally retarded or physically and permanently incapacitated and incapable of supporting himself or a child referred to in paragraph (c), upon marriage or upon attaining the age of twenty-one, whichever is the earlier; or

a child who is receiving education in an institution of higher learning but not beyond education leading to a first degree, upon completing or ceasing to receive such education or upon marriage, whichever is the earlier.

Where subsection (1) is applicable, but such child is under this

Act eligible to be paid a derivative pension or other benefit, such child shall, subject to section 17, be paid the portion of the derivative pension or other benefit due to him as from the publication of this Act.

sustaining an injury in the course and arising out of performance of his official duty or due to a travel accident;

or

contracting a disease to which he is exposed by the nature of his duty.

For the purpose of subsection (1), “injury” or “disease” means injury or disease which is not due to, or aggravated or contributed by, his negligence or misconduct.

Dependant’s pension

the employee dies in the circumstances under section 19;

and

such death occurs within seven years of the date of sustaining the injury or contracting the disease.

24 Laws Of Malaysia ACT 239

a debt due to the Government, or the Government of any

State, or a statutory or local authority;

an order of a court for the payment of periodical sums of money towards the maintenance of the wife or former wife or child, whether legitimate or not, of the employee to whom the pension, gratuity or other benefit has been granted; or

an order of a court issued in relation to bankruptcy matters under any written law relating to it.

The pension or other benefit under subsection (1) shall be restored with retrospective effect in the case of a person who after conviction receives a free pardon.

Where a pension or other benefit ceases under subsection (1), the Minister may grant an alimentary allowance equivalent to the whole or any part of such moneys to which the pensioner would have been entitled by way of pension or other benefit as he thinks proper to the pensioner’s wife or children for their maintenance and benefit and, after the expiration of his sentence, to the pensioner himself.

Statutory and Local Authorities Pensions 25

Where pension or other benefit ceases under subsection (1), no pension or other benefit shall be granted to the dependants.

Subject to subsection (1), where an employee has retired under paragraph 11(a) and within a period of five years thereof such employee involves himself in any activity which may be in conflict with the purpose of his retirement, the Minister may suspend his

26 Laws Of Malaysia ACT 239

pension until he reaches the age of sixty years or completes a period of five years’ retirement, whichever is the earlier.

Where an employee referred to in subsection (2) who was reappointed before 1 January 2012 had been given an option before such date and had not opted for the compulsory age of retirement of sixty years, subsection (2) shall apply to him with the words ‘fifty-five’

or ‘fifty-six’ or ‘fifty-eight’, as the case may be, being substituted for the word ‘sixty’.

Where any payment is made in good faith under this section and in accordance with the provisions of this Act and of the regulations made thereunder, such payment shall constitute a full and proper discharge of all liability and no action, suit or proceedings for such payment or calling such payment in question be brought or shall lie against the Government or any of its officers or servants.

For the purpose of this section—

cases of cheating in order to enjoy the pension and other benefit conferred under this Act; or

offences under the regulations made under this Act.

Any reward paid under this Act shall be charged on the Federal

Consolidated Fund.

Notwithstanding any written law to the contrary, upon the winding up of the fund of the pension scheme of a statutory or local authority, the pension authority shall exercise the powers and perform the duties of the appropriate authority of such scheme.

Nothing in this section shall be deemed to diminish the amount of pension, gratuity or other benefit to which an employee would have been eligible if not for this section.

*NOTE—see section 11 of the Statutory and Local Authorities Pensions

(Amendment) Act 2011 [Act A1410] w.e.f. 1 January 2012 which provides the following provision:

Savings and transitional

has optionally retired;

has exceeded the age of fifty-five years; and

has attained his compulsory age of retirement.

The grant of a pension to an employee who before 1 January 2012—

The payment of derivative pension or derivative retiring allowance in consequence of the amendments made under section 7 of this Act to any person prescribed in the regulations, if the period of twelve and a half years has expired before 1 January 2012, shall be dealt with as follows: