TNAG-2421-FCO40-3523-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 35

HONG KONG LEGISLATIVE COUNCIL — 7 February 1990

香港立法局 ————一九九○年二月七日

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SECRETARY FOR HEALTH AND WELFARE: No, Sir, I cannot answer that

question on the actual quality of the water.

Question 4 withdrawn

Civil service pension scheme

5. MR. PETER WONG asked: Will Government inform this Council of the long-term cost of the civil service pension scheme as a percentage of basic salary, compared with the cost of the typical retirement benefit scheme in the private sector, and whether professional actuarial advice has been taken on the value of the civil service pension scheme?

CHIEF SECRETARY: Sir, in 1986 the United Kingdom Government Actuary's Department was commissioned to assess our future civil service pension liability in the course of our examination of the proposed new pension scheme. The assessment has recently been updated by the Treasury which shows that the average pension on-cost for staff on the Directorate and Master Pay Scales on the new pension scheme is about 25% of salary. Pension on-cost is the notional amount which needs to be set aside to meet future pension liabilities in respect of a particular officer.

A diversity of superannuation schemes and provident funds are currently in operation in the private sector. Of the total number of employees covered by the authorized schemes, about half of them are required to contribute towards the funding. As as I know, the schemes operated by major corporations and public utility‹npanies are mostly non-contributory. The average employers' contributions range from 5% to 15% of salary and the employers are normally obliged to make up for any deficiency of the pension funds.

It is difficult to make comparisons between schemes in the private sector and public sector. Most provident funds operated by private sector companies provide a highly flexible system allowing employees to withdraw their benefit and move to other firms several times during their career. In contrast, the government pension scheme generally makes benefits available only at the end of the officer's career.

MR. PETER WONG: Sir, what is the pension on-cost that should be set aside to meet future pension liability, and also when expressed as a percentage of the