Zaliha said changes for new permanent appointments would not alter the remuneration structure for current and retired public servants.

“This includes any fixed allowances,” she said in a written parliamentary reply.

“Therefore, in relation to the new methods of permanent appointments in the civil service, it is expected that the productivity of civil servants will not be affected by the introduction of this new retirement benefits system.”

She was responding to a question from Aminolhuda Hassan (PH-Sri Gading), who asked about the potential for decreased productivity in the public service after the pension scheme is abolished.

Zaliha said the government, in reviewing the current remuneration system, will take into account the need to attract the nation’s top talents into joining the civil service.

On Jan 23, public services director-general Wan Ahmad Dahlan Abdul Aziz said the government would introduce a contract appointment system for new recruits in the civil service sector.

Deputy prime minister Ahmad Zahid Hamidi later said this was merely a temporary measure before the Cabinet approves a new policy on hiring civil servants for permanent posts.

He said this was because the government planned to abolish civil service pensions for new appointments, who would instead contribute to the EPF and Social Security Organisation.

Zahid said Putrajaya would have to pay RM120 billion in pensions by 2040 if a new system is not introduced.