KUALA LUMPUR - Pensioners of the Sabah Ports Authority (LPPS) have been urged to bring their long-standing pension dispute to the Human Rights Commission (Suhakam) to determine whether their rights have been violated.
“The Ministry of Finance’s refusal to release the RBS pension funds to these retirees amounts to a human rights violation,” he said during his address in the Dewan Rakyat on December 3, highlighting the Sabah Government’s failure to resolve the retirees’ claim involving the Retirement Benefit Scheme (RBS).
He questioned why the government has withheld RM6,914,692.62 that should have been fully disbursed to the retirees.
“Tuaran wants to know—if the government maintains its stance not to give the money to the rightful retirees, does this not constitute a violation of human rights?” asked Madius, who also serves as the Tamparuli Assemblyman.
He also questioned why the RBS funds were transferred to KWAP instead of the EPF as required under Regulation No. 14 of the RBS.
“Was this a deliberate attempt to deny employees their rightful retirement funds?” he said.
According to Madius, representatives of the LPPS retirees had expressed dissatisfaction with the finance ministry’s earlier explanation. They subsequently wrote to him in June 2025, seeking his leadership in pressing for their accumulated RBS funds, which they view as their “pension” benefits.
The Ministry of Finance, in its response, maintained that no human rights breach had occurred, stating that LPPS employees were informed of the benefits tied to their chosen retirement option.
It explained that contributions under the RBS involved only employer contributions—20 percent paid by LPPS—with no deductions from employees. The ministry added that following the Harun Commission in 1975, LPPS employees were given options when the scheme was terminated under the Pensions Act 1980 (Act 227) and the Statutory and Local Authorities Pensions Act 1980 (Act 239). Those who opted for the Full Pension Scheme or full EPF benefits have continued to receive their entitlements.
The ministry further noted that the Sabah and Sarawak High Court in Kota Kinabalu dismissed the employees’ claims on March 22, 2010, ruling that there was no undistributed balance owed to them. The court held that the retirees were “estopped” from pursuing further claims under the principle of res judicata.
The dispute stretches back more than 50 years. On July 1, 1969, LPPS established the RBS as a retirement and protection scheme with 20 percent employer contributions. After the statutory pension scheme was introduced through the Harun Commission in 1975, contributions to the RBS stopped. However, the scheme only formally ceased operations on February 28, 1981, during which time no retirees received any RBS “pension”.
In 1996, during its 221st board meeting, LPPS decided to fully discontinue the scheme and transfer the accumulated funds to KWAP. The transfer of RM6,914,692.26 was completed in stages—RM1,092,198.14 in 2006 and RM5,822,494.82 in 2012.
In 2010, 165 of the 300 eligible pensioners filed a lawsuit at the Kota Kinabalu High Court to reclaim their benefits. The case was dismissed, with the court finding that 157 of the plaintiffs were already under the Full Pension Scheme and eight were EPF beneficiaries. The group appealed but later withdrew the case in May 2012 based on political advice, resulting in the doctrine of estoppel being applied, preventing further legal action on the same issue.
The government later approved two ex gratia payments of RM2,100 and RM2,500 in February and November 2019 under the Pakatan Harapan administration. However, Madius argued that these payments reflected the retirees’ rightful ownership of the RBS funds, amounting to RM6,914,692.26.
The Ministry of Finance responded that once the Harun Commission replaced the RBS, employer contributions under the scheme were required to be transferred to the government, which was done in 2006 and 2012 under Section 13(2) of the Retirement Fund Act 2007 (Act 662). Therefore, RBS Regulation No. 14 no longer applied.
The ministry also addressed Madius’ query regarding alleged inconsistencies between JPA instructions and the Finance Minister’s decision, clarifying that the issue no longer arises. It said the Ministry of Finance, JPA, and KWAP had jointly reviewed the matter in May 2017 and concluded that RBS funds were employer contributions that rightfully had to be handed over to the government in line with the statutory pension scheme. This position was also consistent with the 2010 court ruling, which prevents the retirees from reopening the claim based on res judicata.