28 September 1992
(By Fax)
Miss C Tsang
жи
Curisence Gen, ple
не
in
reg.
BP 11/11+ Recor
iil
Government Secretariat
HKA CIE/1
Lower Albert Road
Hong Kong
FONIC (79
Foreign & Commonwealth
Office
File
539
London SWŁA ZAHL
Telephone: 071-270 9652
Dear Miss Tracy,
валу
PUBLIC SERVICE PENSIONS FUNDING
512
Thank you for your letter of 28 August 1992 to Mr Stone, in which you ask what the approximate cost would be for commissioning the Government Actuary's Department (GAD) to conduct an actuarial valuation of Hong Kong pension liabilities in the years after 1997.
GAD have advised us that the cost would depend upon the scale of the work required. A basic projection of the size and timing of pension scheme payments after 1997 in respect of Hong Kong civil servants would probably cost in the region of £8,000. This estimate has been made on the basis of previous work undertaken by GAD for Hong Kong and other recent similar investigations.
For this type of review, you would need to provide GAD with data about the schemes and their members. This data would presumably be grouped by age and member classification. GAD would make a simple check of the data for internal consistency and consistency with the data supplied for previous investigations, but would not scrutinise data for individual employees.
It would also be sensible if the projections could take account of information about members choosing to switch from the old pension scheme to the new pension scheme and contract officers choosing to switch from a gratuity basis to pensionable status. GAD would decide on suitable assumptions about the economic and demographic factors which influence the future payments of scheme benefits, but would not undertake a detailed analysis of the demographic experience of Hong Kong civil servants in recent years unless you wished them to do so.
GAD would then undertake the calculations to project the annual expenditure on members' pensions, retirement allowances, and widows' and children's pensions from 1997/8 onwards. If necessary, they could summarise the projections for different groups of staff and could also show the results separately for existing employees and for an assumed pattern of future recruits. An indication could also be given of the sensitivity of the projections to different assumptions or to any major changes anticipated around 1997.
In addition to these basic projections GAD think that it would be helpful to calculate a capitalised value for all pension liabilities in respect of commitments already entered into.