it would be very difficult to justify setting aside funds on
this scale for the benefit of a small section of society.
23.
However,
it may be possible to overcome
constraints, if the size of the
the
financial and political
reserve fund is scaled down to cover one, year's pension
expenditure only. Initially $3 billion would be required to
set up the fund in 1992/93, with some annual topping up
thereafter.
Arı estimate of the costs of a one-year roll
forward reserve fund is at Annex D.
24.
Although not the complete answer, there are
advantages in a one-year roll forward pension reserve fund.
First it would demonstrate that the Administration has
addressed staff concerns, and this would provide an important
psychological boost to the Civil Service. It would provide
some additional safeguards and security of pensions for all
serving officers and pensioners; and could also provide` a
The
useful cushion upon which to draw in lean years.
proposal does not involve any changes to present retirement
arrangements, although some legislative amendments would be
necessary in connection
with the establishment of the fund.
It would not encourage
service early. A partial funding option also appears to have
the support of the Chinese in principle, although they might
well argue for a larger two to three year roll forward
or facilitate officers to leave the
reserve.