Brunei's Hidden Benefits in Old Age Pension Payouts


On 10 October 2006, during the Nuzul Al-Quran celebration, His Majesty announced a 25% increase in old age and handicapped pensions which marked the 8th time this pension has been increased since it was first introduced in 1955 by our 28th Sultan. When it was first announced in 1955, it was the first time that the government has enacted a government funded modern welfare system.

The pensions are paid under the Old Age and Handicapped Pensions Act (Chapter 18) and was first introduced in 1955 when our 28th Sultan, His Majesty Sultan Haji Omar Ali Saifuddien III first announced it in a Christmas Eve speech. His Majesty when announcing it stated that the pensions are to ensure that the old aged and the handicapped in this country gets sufficient care from the government.

Just for the record, the amount of old age pension paid out monthly was $20.00 in 1955, $25.00 in 1971, $30.00 in 1973, $37.50 in 1977, $50.00 in 1980, $100.00 in 1984, $150.00 in 1991, $200.00 in 1998 and $250.00 in that 2006 announcement.

Unlike other countries, whose pensions and welfare schemes are either funded by contributions from the existing workers' salaries deductions (famously known as pay-as-you-go schemes) or from savings from the workers when they were working, the Brunei pensions and welfare schemes are funded directly from the government coffers.

The number of recipients have increased as Brunei's population aged and Village Leaders and Mukim Penghulus who have been tasked to do the payouts have come under pressure so as to ensure that the pensions are paid out as quickly as possible. A couple of weeks back, arguments broke out in Seria leading to a number of comments that payment should be made electronically. That can be done easily but one of the hidden benefits of ensuring manual payment is that His Majesty wanted the village leaders to at least take time once a month to see for themselves that the old age pensioners are alright. In Japan, postal office workers have been tasked to do this. At least in Brunei, village leaders can still do that.

I saw a letter in The Brunei Times recently which highlighted the same sentiment:
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Dear Editor,

Thursday, December 25, 2014

I REFER to the letter to the editor titled “It is high time to embrace technology for pension payment in Brunei” (The Brunei Times, December 12, 2014.

I believe this was with regard to the incident which took place in Kuala Belait during pension collection and hence, the suggestion for pension payment to be made online or straight to the recipients’ accounts.

I have my own thoughts on how this issue should be dealt with, which takes into account a number of factors.

Firstly, the idea behind the current way of pension distribution as prescribed by law under “Old Age Pension and Disability Act 1954” is a means for the government or community representatives, in this instance, the village heads, to be in touch with the pensioners, check on their well-being and assign care if necessary. This face-to-face interaction ensures that the village heads as government representatives can carry out their responsibility riding on the existing pension distribution mechanism. Furthermore, to my knowledge as stipulated in the Old Age Pension and Disability Act 1954, the village head is tasked to distribute the pensions to the recipients.

Turning back to the incident in Seria with great humility I was shocked to see that our senior citizens behave in such a manner. I look up to our seniors to be role models for our younger generation by demonstrating patience and perseverance. I hope such instances will not occur and that our senior citizens continuously show the best example to the younger generation.

In Japan which has a sizeable ageing population, the post offices have resorted to sending greeting cards periodically to the elders, especially those living on their own, and assigning their postmen to deliver those cards as a means to check on their well-being as incidents of the undiscovered deaths of elders for days have happened in the recent past.

So, be careful what one wishes for; by taking away this existing and long-standing practice of direct distributions of pension cash to our senior citizens, we may deprive ourselves of the most assured link between the pensioners and our benevolent government.

One thing I agree though is that the manner the distribution must be made more efficient in order to minimise any inconveniences. But, in so doing, the current way of pension distribution must stay.

It should be seen as more than giving cash away; it is also about caring for this group of people. To go online or pay directly into their account may take away the opportunity for such interaction, something we may come to regret.

Concerned Citizen

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