CONFIDENTIAL
CONFIDENTIAL
FM HONG KONG
TO PRIORITY FCO
TELNO 276
OF 20084OZ JANUARY 88
INFO PRIORITY ODA
HKC
233/2
FICH
166536 MDLIAN 3691
+
FOR FOOTMAN FROM WILLIS
LIMITED COMPENSATION SCHEME
BENEFITS UNDER THE LIMITED COMPENSATION SCHEME ARE CALCULATED BY REFERENCE TO ACTUARIAL TABLES. DIFFERENT TABLES ARE DESIGNED FOR OFFICERS ON THE OLD PENSION SCHEME WITH A RETIREMENT AGE OF 55, AND FOR THOSE ON THE NEW SCHEME WITH A NORMAL RETIREMENT AGE OF 60.
2.
THE PENSION LEGISLATION PROVIDES THAT HEADS OF THE DISCIPLINED SERVICES MAY ON OPERATIONAL GROUNDS PRESCRIBE A LOWER RETIREMENT AGE BETWEEN 55 AND 60 FOR THEIR STAFF. (S 10(3) OF THE PENSION BENEFITS ORDINANCE 1987). STAFF REQUIRED TO RETIRE AT THE PRESCRIBED AGE ARE ELIGIBLE FOR AN ENHANCED PENSION TO COMPENSATE FOR LOSS OF SERVICE (REGULATION 19 OF PENSION BENEFITS REGULATIONS 1987). A DISCIPLINED SERVICE OFFICER ON THE NEW PENSION SCHEME WHO IS REQUIRED TO RETIRE (NEXT WORD UNDERLINED) BEFORE THE PRESCRIBED RETIREMENT AGE UNDER THE TERMS OF THE LIMITED COMPENSATION SCHEME WILL NOT, HOWEVER, RECEIVE THE ABOVE ENHANCED PENSION. HIS COMPENSATION SHOULD THEREFORE COVER THE LOSS OF CAREER WHICH HE WOULD OTHERWISE HAVE BEEN ABLE TO MAKE UNTIL THE NORMAL RETIREMENT AGE OF 60. THE ACTUARIAL TABLE BASED ON A RETIREMENT AGE OF 60 SHOULD BE USED FOR THE CLACULATION OF HIS BENEFITS IRRESPECTIVE OF WHETHER HE IS SUBJECT TO A LOWER RETIREMENT AGE PRESCRIBED BY HIS HEAD OF DEPARTMENT.
3.
WE HAVE BEEN ASKED TO SEEK CONFIRMATION FROM THE GOVERNMENT ACTUARY DEPARTMENT (GAD) THAT THE APPLICATION OF THE ACTUARIAL TABLES IN THE CIRCUMSTANCES SET OUT ABOVE IS IN ORDER. GRATEFUL IF.. YOU REFER OUR REQUEST TO GAD FOR ADVICE.
WILSON
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