15
Other Pension Safeguard Options
Higher Commutation
25.
Existing
commutation of
Scheme (NPS).
pensions
legislation
permits
maximum
50% of pension benefits under the New Pension
One
proposal is simply to allow officers on
NPS who leave at the normal retirement age to commute a
higher percentage of their pension benefits, say 75%.
26.
If 75% commutation is introduced with effect from
1992/93, the additional cashflow by 1997/98 could amount to
about $3.9 billion (an average additional cost of $645
million p.a.). A forecast of the annual pension expenditure
for 50% and 75% commutation at 1991/92 prices is at Annex A.
27.
The major limitations of this proposal are: the
number of officers who would benefit in the next few years is
small; the vast majority of staff who still have some years
to serve before retirement therefore would not see it as an
It would also lead to an
effective
pension safeguard.
additional cash outflow in the short to medium term.
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