Madius…The Ministry of Finance’s decision not to release the RBS pension to the 300 retirees is a violation of human rights.
KUALA LUMPUR : – The Sabah Ports Authority (LPPS) Pensioners have been advised to raise with the Human Rights Commission (Suhakam) for investigation into the possibility of human rights violations over their decades-old pension matter.
Tuaran Member of Parliament Datuk Seri Wilfred Madius Tangau said he is in agreement with the 300 LPPS retirees who firmly believed that they were victims of injustice by the Ministry of Finance.
“The Ministry of Finance’s decision not to release the RBS pension money to the 300 retirees is a violation of human rights,” he said in his speech when informing the Dewan Rakyat on the Sabah Government failure to resolve the LPPS retirees’ claim for Retirement Benefit Scheme (RBS) retirement money on December 3.
He questioned the government’s reason for preventing the sum of RM6,914,692.62 from being fully released to the LPPS retirees.
“Tuaran would like to know that if the government insists on not giving the money to the (deserving) retirees, is this not a violation of human rights?” asked Madius, who is also Tamparuli Assemblyman.
He asked why the RBS money was sent to the KWAP and not to the EPF as required by Regulation No. 14 of the RBS.
“Was it a deliberate move to deny the employees the right to receive the retirement funds, ” Madius asked.
He said that representatives of the LPPS retirees were not satisfied with the response from the Ministry of Finance previously, who then subsequently wrote a letter to him in June 2025 to request that he led the fight to demand their right to receive the accumulated RBS funds as their “pension” benefits.
The Ministry of Finance in its response said that there was no issue of human rights being violated against the retirees because prior to the option selection, the LPPS employees have been given an explanation of the benefits they would receive based on the option chosen.
“The contributions the retirees in RBS only involve employer contributions, which were fully funded by the employer (LPPS) at 20 percent. There were no contributions made by employees as alleged.
“Following the introduction of statutory and local body pension schemes through the Harun Commission (1975), LPPS employees were given a choice when the RBS scheme was terminated in accordance with the Pensions Act 1980 (Act 227) and the Statutory and Local Authorities Pensions Act 1980 (Act 239),” he said.
The Ministry of Finance was confident that LPPS retirees who opted for the Full Pension Scheme or Full EPF Benefits following the Harun Commission have and are still receiving their respective benefits.
The Ministry also pointed out that on March 22, 2010, the Sabah and Sarawak High Court Kota Kinabalu had decided to dismiss the claims of these employees. Hence, there is no undistributed share of the employees as claimed, he said.
The court, he said, has ruled that the LPPS retirees who made the claims have been ‘estopped’ from requesting the balance to be returned to them and this matter cannot be reopened (pursued) on the principle of ‘res judicata.’
This case dates back more than 50 years. For the record, on 1 July, 1969, LPPS had established a retirement and protection scheme for its employees which was administered through formal regulations called RBS, where LPPS contributed 20 percent of each employee’s annual salary.
Following the implementation of the Statutory Body Pension Scheme through the Harun Royal Commission in 1975, LPPS stopped contributing to RBS.
However, the fund only “ceased to operate” until RBS was officially discontinued on Feb 28, 1981 during which that period, no retired staff received any “pension” from the RBS scheme.
Madius further said that in 1996, the 221st LPPS Board Meeting decided to completely discontinue with the RBS Scheme and transfer the accumulated funds to the Retirement Pension Fund (KWAP).
Subsequently, LPPS transferred RM6,914,692.26 to KWAP in stages, namely RM1,092,198.14 in 2006 and RM5,822,494.82 in 2012.
But in 2010, a group of 165 pensioners out of 300 surviving pensioners entitled to receive “pension” benefits, took action to claim their rights through legal action at the Kota Kinabalu High Court.
However, the Court dismissed the claim and found that the 157 plaintiffs were in the full pension scheme and eight plaintiffs were full EPF benefit recipients.
They then appealed to the Court of Appeal, but on political advice, they withdrew the appeal in May 2012 resulting in the “Doctrine of estoppel” which prevented the plaintiffs from initiating any new legal action against LPPS and RBS for the same claim.
The government decided to pay ex gratia twice at the rate of RM2,100 and RM2,500 respectively in February and November 2019 under the Pakatan Harapan Government in 2018.
However, Madius considered the ex-gratia granted to the pensioners to be a ‘consideration’ that the funds accumulated in the RBS Scheme totaling RM6,914,692.26 were the absolute property of 300 RBS members, namely LPPS employees.
The Ministry responded that when the Harun Commission replaced RBS, the employer’s contribution in RBS for LPPS employees who chose the Full Pension Scheme had to be handed over to the Government.
Accordingly, it was transferred over to KWAP in 2006 and 2012 in accordance with Section 13 (2) of the Retirement Fund Act 2007 (Act 662) and not the EPF.
Therefore, RBS Rules no. 14 that was raised was no longer applicable when the Harun Commission was introduced.
The Ministry of Finance also answered Tuaran’s second question on why there was a discrepancy between the JPA’s instructions and the Finance Minister’s decision. And did the Ministry of Finance make an arbitrary decision without taking into account the existing regulations and the JPA Circular which is very clear.
The Ministry said that the question of there being a discrepancy between the JPA and the decision of the Minister of Finance no longer arises.
This is because the Ministry of Finance together with the JPA and KWAP in May 2017 had examined this matter and after taking into account the facts and the position under the law, found that the RBS was the retirement contribution of LPPS employees which was fully funded by LPPS as the employer.
In line with the introduction of the statutory body and local government pension scheme through the Harun Commission, the employer contribution in the RBS for LPPS employees who chose the Full Pension Scheme must be submitted to the Government.
This decision, he said, is in line with the court decision on 22 March 2010. The court had ruled that the LPPS retirees who made the claim were estopped from requesting the balance to be returned to them and this matter cannot be reopened on the principle of res judicata.
