3
New Pension Scheme
under the Pension Benefits Ordinance and
Regulations 1987
If he opts to commute 50% of annual pension into a lump sum, he will receive
Commuted = Unreduced annual pension x 50% x 14 pension
gratuity
Old pension scheme
under the Pensions Ordinance and Regulations, Cap. 89
If he opts to commute 25% of annual allowance into a lump sum, he will receive
Commuted annual allowance gratuity
plus
= Unreduced annual allowance x 25% x 14
plus
Reduced annual pension
= Unreduced annual pension x 50%
Reduced
annual allowance
-
Unreduced annual allowance x 75%
Example
A Category B officer retiring at the age of 60 after completing 450 months' service, 200 of which was prior to 1.4.87, with a highest annual salary of $36,000 -
Example
A Category B officer retiring at the age of 55 after completing 390 months' service, with a highest annual salary of $36,000 -
Unreduced
annual
=
$36,000 x (200 x
1 800
+ 250 x
1 675
>
pension
$22,333 p.a.
If he opts to commute 50% of his annual pension into a lump sum, he will receive
-
Unreduced
annual allowance
=
$36,000 x (300 x + 90 x
1
800
>
600
$18,900 p.a.
If he opts to commute 25% of his annual allowance into a lump sum, he will receive
Commuted
Commuted pension
=
$22,333 x 50% x 14
gratuity
= $156,331
plus
Reduced
annual pension
$22,333 x 50%
= $11,167 p.a.
-
$18,900 x 25% x 14
annual
allowance gratuity
=
$66,150
plus
Reduced annual allowance
=
$18,900 x 75%
$14,175 p.a.
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