No go for CPF reversal bid
By Loh Chee Kong. TODAY | Posted: 08 May 2007 1139 hrs

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SINGAPORE: The country’s highest court has rejected a class action suit by 100 veteran civil servants who want to return to the pension scheme, 34 years after they had opted for the Central Provident Fund (CPF).

In doing so, the Court of Appeal upheld the High Court’s earlier ruling that state pension was an entitlement and not an absolute right for civil servants, and that the 1973 option was legally binding.

The case was first heard by the High Court in May last year, but was thrown out after four months. Undeterred, the group took their grievances to the Court of Appeal.

Yesterday, after a 10-week deliberation by Justices Andrew Phang, V K Rajah and Lai Siu Chiu, the court dismissed the appeal and ordered the group to pay costs.

Delivering the 52-page written judgement, Justice Phang said the judges were mindful of the wider impact of their decision.

"Given the important issues that were raised as well as the consideration that a great many public officers would be affected by the outcome of this appeal, this court reserved judgement in order to consider the relevant legal material as well as arguments before it in greater detail,” he said.

The group, represented by lawyer V Ramayah, had claimed that the then Permanent Secretary of Finance had only highlighted to them the advantage of using the CPF to buy housing board flats, and did not inform them that they would lose their medical benefits.

Mr Ramayah also argued that the civil servants’ rights to a pension were enshrined in the Constitution as part of a social policy, and could not be “contracted out by private treaty”.

But Justice Phang flatly rejected this, adding that the argument was “both illogical as well as misleading”. The judge said: “We cannot see how it could be argued that where the officers concerned are, in fact, offered a free choice to opt for what (in their minds) is a better scheme, the ideals … mentioned have been undermined or contravened.”

Justice Phang also reiterated that the group had benefited from the switch to the CPF scheme, including the possibility of using CPF funds to pay for housing.

He said: “It is true that they now feel they are better off opting back to the pension scheme. However, they have disingenuously omitted throughout (the hearings) to state that they have benefited from the CPF scheme in ways that cannot be quantified.” - TODAY/fa