COSTINGS
ANNEX B
Costings need to be carried out for three possible variations of schemes: a classic General Compensation Scheme: a compensation
scheme based on ten annual payments of 10% of the compensation that would have been payable under a classic scheme starting in 1997 to officers who remain in service for those years; and a compensation/
incentive scheme based on a payment in 1997 of 50% of the then
annual salary plus further payments of 25% of annual salary for up to nine years (if continued service). For each variation, the best,
median and worst case senarios set out in Annex A need to be
covered.
For the purposes of these calculations, current (April 1990) Hong
Kong salaries are used. This effectively assumes that salaries do no more than keep pace with inflation.
Classic General Compensation Scheme
This would involve compensation for loss of career and early payment of pension. Compensation would be actuarily calculated. We
consider that HMG would have to meet the early payment of pensions
until the officers became of pensionable age when the SARG would
take over.
Since this scheme would be exceedingly attractive the calculations
assumes that all the HMOCS members would stay on to 1997 to
benefit from the scheme. The costs increase as more members quit
after 1997 HMG has to pick up on increasing pension liability.
The costs thus are:
Best case scenario
Median case scenario
£ 57 million
£ 131 million
Worst case scenario
£ 163 million
Compensation Scheme based on ten payments of 10% compensation
This scheme involves only compensation - no early payment of
ВАТАНА