put aside, sufficient to meet the pension payments for five
years, but only to be drawn from in lean years. Though the
(estimated to be about $15 billion) will not
size of the fund
be as prohibitive
as that required for full funding,
consideration needs to be given to its economical and
financial impact, the cashflow implications and
cashflow implications and the question
of how the fund should be maintained at an appropriate level,
its management, investment of balances etc.
11.
of
some start have suggested full commutation
pensions. This would enable retirees to receive their earned
pension benefits in a lump sum. Again, this would have
cashflow implications which need to be carefully assessed in
the light of our current financial position. It is also
to consider the
acceptability of the proposal to
younger officers. The alternative of a 75% commutation of
pensions has also been suggested.
necessary
12.
recruitment and could
The staff suggestion of a provident fund scheme is
in line with private sector practice. It would offer staff a
higher degree of flexibility, help
reduce pension costs in the long term. However, for the same
reasons which argue against full funding of pensions, it will
not be possible to have a scheme which covers the pension
benefits accrued in respect of past service. The structure
of any provident fund scheme for the civil service must have
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