Hong Kong Civil Service Pensions
1.
Hong Kong civil service pensions are paid out
of general revenue (about 3-4% of annual government expenditure). The Joint Declaration and the Basic Law provide that after 1997 the Special Administrative Region Government will continue to pay all pensions, gratuities, allowances and benefits to public servants on terms no less favourable than before. Recent legislation in Hong Kong provides that pensions are a statutory right and a statutory charge on general revenue. Further legislation will soon be introduced into the Legislative Council to provide that pensions should be increased in line with inflation. A new pension scheme has also been introduced which provides for deferred pensions (ie payable at normal retirement age) for officers who serve at least 10 years.
The deadline for joining this scheme is now 31 December 1992. Under this scheme, officers can commute up to 50% of their pension in a lump sum upon retirement as opposed to 25% under the old scheme.
2.
Given the assurances and safeguards which already exist, it would require total collapse of the Hong Kong economy for the Government to be unable to meet its pension commitments. However, civil servants remain concerned and have asked for an additional safeguard in the form of a reserve fund equivalent to 5 years expenditure on pensions (the Hong Kong Government estimate this to be HK $15 billion). The idea is that the
fund could be drawn on if HKG/SARG was in financial
difficulty.
3. In response to civil servants' concerns, the Hong Kong Government is examining possible safeguard options.
decisions have been taken.
No
hk.civ.ADM
SLM