in 1992 and retiring in the year 2002 would suffer ten 12%
reductions from his eventual lump sum see table attached. The rather measly sum that would result and be in the
officers hand in 1992 would then be invested with, say, an
appropriate UK institution which would probably be
willing/able to guarantee a return of about 8%. The officer would therefore end up with, roughly 69% of what he is
"due".
5. Beyond the 10 year time frame, he thought that
institutions would begin to get very nervous and therefore
would start to quote very high discount rates.
6. Baring's were concerned at the amount of money that
might be entailed. They seem to think that if the total
amount institutions would need to find was roughly HK$2bn,
that this would present no problems. They did not suggest an upper limit. $2bn would not cover very many officers but
it would quite easily cover all HMOCS officers who are likely to be around and likely to retire in that time frame.
Conclusion
7. Baring's clearly think that for an effective self limiting group of people (ie those retiring up to about
2002), this could be an attractive scheme to the private
sector. It of course does not solve the problem for the
great bulk of people who will not retire in this period.
But if HKG were to make available such a scheme to civil
servants in general, then one can conceive of the Treasury
being able to put some money in to make it slightly more
attractive for HMOCS officers. How they would cater for
HMOCS officers retiring well beyond 2002 was not discussed. I suspect Treasury thinking is that HMG would make this scheme available and ignore the fact that it would be essentially impracticable for many officers.
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