TNAG-2398-FCO40-3485-Hong-Kong-Civil-Service-policy-1992 — Page 21

SECRET

FM HONG KONG

TO DESKBY 02130OZ FCO

TELNO 2816

OF 02121OZ DECEMBER 92

SECRET

HKA 016/1

AND TO IMMEDIATE UKREP JLG HONG KONG

PERSONAL FOR RICKETTS, HKD. SERVICE.

MIPT: LOCAL PENSION SAFEGUARDS:

98

124441

MDHIAN 0327

TOP COPY Q DIST ?

ра

FROM SECRETARY FOR THE CIVIL

SPEAKING NOTE FOR SCS TO BRIEF

STAFF PENSION SAFEGUARDS AND EXTENSION OF THE NPS OPTION DEADLINE.

INTRODUCTION

AS YOU KNOW WE HAVE BEEN STUDYING VARIOUS PENSION SAFEGUARD SUGGESTIONS. THESE INCLUDE:

(A) GREATER COMMUTATION:

(B) A PROVIDENT FUND SCHEME FOR FUTURE SERVICE:

(C)

(D)

(E)

AN 'HYPOTHECATED PENSION FUND SCHEME AND VARIOUS OTHER PRIVATE SECTOR OPTIONS:

VARIOUS PENSION SAFEGUARDS OPTIONS RELATING TO HOUSING

BENEFITS: AND

PARTIAL FUNDING.

PENSION SAFEGUARDS.

2. WE HAVE LOOKED AT ALL OPTIONS. THERE ARE NO EASY SOLUTIONS. AS YOU KNOW PENSIONS ARE A STATUTORY RIGHT AND A STATUTORY CHARGE ON THE GENERAL REVENUE. IN ADDITION WE HAVE JUST INTRODUCED LEGISLATION INTO LEGCO PROPOSING THAT ANNUAL PENSION INCREASES IN LINE WITH INFLATION BE MADE A STATUTORY RIGHT. THE JOINT DECLARATION AND THE BASIC LAW PROVIDE SPECIFIC GUARANTEES FOR THE CONTINUED PAYMENT OF PENSIONS ON TERMS NO LESS FAVOURABLE THEN BEFORE. NEVERTHELESS WE ALSO RECOGNISE THE STRENGTH OF STAFF FEELING ON THIS ISSUE AND UNDERSTAND THAT STAFF CONCERNS ARE A

MATTER OF PSYCHOLOGY AS WELL AS LOGIC.

3.

THE GREATER COMMUTATION, PROVIDENT FUND SCHEME FOR FUTURE SERVICE, HYPOTHECATED PENSION FUND SCHEME AND THE HOUSING RELATED SUGGESTIONS ARE NOT FEASIBLE OPTIONS FOR THE GOVERNMENT AND DO NOT REALLY PROVIDE A PENSION SAFEGUARD. WE DO NOT INTEND TO

PAGE

SECRET

1