CONFIDENTIAL
OPTION B: UK COMPARATOR
HMG to underwrite pensions at a level comparable to those received by equivalent grades in the UK, ie if the sterling value of an HMOCS officer's pension fell below that of his UK grade equivalent, HMG would make up the difference.
POTENTIAL COST:
A trigger level which would give a broad "salary equivalence" between Hong Kong and UK civil servants would be about
HK$22:£1. Thus, the potential cost would be similar to that in the table in Option A at the trigger level of HK$22: £1.
Advantages:
(a)
(b)
(c)
(a)
Fair to the UK taxpayer
Contingent costs likely to be lower than Option A (due to safeguard levels tailored to each officer instead of a single trigger for all)
Provide definite guarantee to officers that the value of their pensions would be safeguarded at the level of their UK counterparts
Equity of treatment for both serving and retired officers
Disadvantages:
(a) Some immediate cost on introduction (some existing HMOCS
pensioners would have retired at below UK pension levels) Difficult to make accurate job comparisons particularly for existing pensioners - would probably be challenged by many HMOCS officers and existing pensioners
(b)
(c)
(d)
Hard to resist demand for immediate introduction for current pensioners
Difficult to administer in effect large numbers of safeguard triggers would apply
options.1.
SLM
CONFIDENTIAL
4
Page 150Page 151