Annex A
(a)
(b)
(c)
(d)
CONFIDENTIAL #3
higher commutation of pensions;
a Provident Fund Scheme for civil servants;
an hypothecated pension fund scheme; and
partial funding of pensions.
Higher Commutation
6.
Existing
pensions
legislation permits
maximum
commutation of 50% of pension benefits under the New Pension
Scheme (NPS).
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%.
7.
If 75%
commutation is introduced with effect from
1992/93, the additional cashflow by 1997798 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.
8.
The major limitations of this proposal are : the
number of officers who would benefit in the next few years is
majority of staff who still have some years
retirement therefore would not see it as an
small; the vast
to serve before
effective
pension
safeguard.
It would also lead
in the short to medium term.
to an
There
additional cash outflow
G.F. 326
CONFIDENTIAL #
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