Barjoyai Bardai of Universiti Tun Abdul Razak said the savings from the move may take decades to realise as the government will need to bear the 13% contribution to the Employees Provident Fund (EPF).

He also said the shift from the pension scheme to EPF contributions may result in the country experiencing a decline in the number of civil servants in various sectors.

“For example, those in the education or medical sector, or engineers. They won’t be interested in working for the government anymore because they won’t have a pension,” he said.

“In the long run, there is a possibility that the productivity of the public sector will decline.

“This could have an impact on certain sectors of the economy that are dependent on projects implemented by this public service group.”

Universiti Keusahawanan Koperasi Malaysia’s Abu Sofian Yaacob suggested that the government raise salaries and EPF contributions to ensure the financial security of civil servants who will no longer receive pensions.

The senior lecturer said this will help boost civil servants’ retirement savings and promote the country’s long-term economic growth.

“The government’s contribution to the EPF should be increased to 20% to help replace the pension these new civil servants will have lost,” he said.

On Wednesday, deputy prime minister Ahmad Zahid Hamidi said new civil servants would no longer receive pensions but would contribute to EPF and the Social Security Organisation (Socso).

He said this would alleviate the government’s financial burden by reducing pension payments, adding that the new policy will be implemented by this year.

At present, civil servants are allowed to choose between the pension scheme and contributions to EPF.

Zahid said that under the new policy, the government will contribute to EPF for new civil servants, similar to how private sector employers do for their workers.