Subsidiary legislation cannot have retrospective effect unless expressly permitted by the principal Act; accrued rights to pensions cannot be modified retroactively.

JUDGMENT

Azizul Azmi Adnan JCA:

Introduction

[1] The appellants in this case, who were the plaintiffs at the court below, were former members of the upper house of Parliament. They retired from the Senate prior to the coming into force of the Members of Parliament (Remuneration) (Amendment) Act 2015, by the terms of which salaries of the then-serving members of the Senate and House of Representatives were significantly increased.

[2] The appellants argued that their pensions ought to be adjusted to account for the increased salaries of the members of the Senate.

Background

[3] Section 3 of the Members of Parliament (Remuneration) Act 1980 provides for the salaries of members of the two Houses of Parliament. Section 8 of the Act in turn provides for the entitlement to pension, gratuity and other benefits, which is prescribed in the First Schedule to the Act.

[4] In 1981, the First Schedule was amended by the introduction of para 19A to grant to the Yang di-Pertuan Agong the power to amend the First Schedule. This power is expressed by para 19B of the First Schedule to be exercisable by the Prime Minister or by any person authorised in writing by the Prime Minister.

[5] On 4 March 2015, in exercise of the powers under para 19A, para 20 of the First Schedule was amended by the Members of Parliament (Remuneration) (Amendment of First Schedule) Order 2015 (the "2015 Order"). Prior to this amendment, the pension of previous members of Parliament would be adjusted to take into account revisions in the salaries of currently serving members. The original para 20 read as follows:

20. Recomputation of pension and derivative pension.

(1) Whenever the salaries of a Member are revised, the salary on which a pension granted under para 2 or a derivative pension granted under paras 5, 6 or 7 is based shall be adjusted to the revised salary as appropriate and the pension or derivative pension recomputed accordingly.

(2) The recomputed pension under subpara (1) shall be payable with effect from the coming into force of the revised salaries.

(3) In the case of a person who, before the coming into force of this Act, ceased to be a Member and he or his dependant is in receipt of a pension or derivative pension, as the case may be, the grant of the pension or derivative pension shall be governed by the provisions of this Schedule and the salary on which a pension granted under para 2 or a derivative pension granted under paras 5, 6 or 7 is based shall be adjusted to the salary of a Member as appropriate and the pension or derivative pension shall be recomputed accordingly and be payable with effect from the date of the coming into force of this Act and thereafter such pension or derivative pension shall be recomputed and payable in accordance with subparas (1) and (2) whenever there is a revision of salaries.

(4) The provisions of subpara (3) shall apply mutatis mutandis to the pension payable under para (b) of s 2 of the Tunku Abdul Rahman Putra Al-Haj Pension Act 1971 [Act 22] as if it wore a pension under this Schedule and paras 5, 6 and 7, as the case may be, shall apply.

[6] The 2015 Order amended para 20 such that there would no longer be any adjustment to pensions to account for increment in salaries of the current members of Parliament. Instead, the pensioners and their entitled dependants would receive an annual increment of two percent. The amended para 20 reads as follows:

20. Recomputation of pension and derivative pension.

(1) Any pension granted under para 2 or derivative pension granted under para 5 or 6 shall be adjusted each year with an increment of two percent and shall be payable from January of each year.

(2) Subject to subpara (1) where a Member is granted a pension only upon attaining the age of fifty years by reason of him becoming a Member for the first time on or after 1 July 1990 and has ceased to be a Member upon completing thirty six months of reckonable service but has not attained the age of fifty years on the date he ceased to be