XCR(75)236
RESTRICTED
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(a)
(b)
(c)
On retirement an officer's initial basic pension or annual allowance should be assessed on the basis of his final pensionable emoluments as a salary earner and on his length of service with Government (as is the present practice pre- scribed in the Pensions Ordinance and Regulations)
This criterion is the present position,
Thereafter it should be the aim to ensure that the original purchasing power in Hong Kong of a retired officer's pension/annual allowance or Widows and Orphans pension is inaintained. Changes in purchasing power should be measured by the Consumer Price Index (A). When an officer has elected to receive a gratuity and reduced pension the increase should be based, as at present, on the actual pension being paid
This recommendation is based on the principle that pensions should be increased soon to ensure that the purchasing power of original pensions is not affected by rising prices. It is proposed that changes in the purchasing power of pensions should be measured by use of the new Consumer Price Index (A); this Index is based on an expen, diture level of up to $1,500 per month, which covers approximately 95% of present pensioners,
Increases in pensions should be assessed Independently of increases in salaries and should not be intentionally related to increases in salaries, either in terms of amount or effective date
The reason for separating pension increases from Je salary increases is that the latter are subject to
several factors which are not relevant to pensions, such as comparisons with pay levels in the private sector, re-gradings, and the general level of economic activity. To preserve the original pur- chasing power of a pension, it is necessary to take into account only movements in the cost of living.
C.S. 04
RESTRICTED
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