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RESULT OF THE RETIREMENT OF EXPATRIATES AND MIGHT THUS BE EXPECTED NOT TO OBJECT TO IT, OVERALL THE IMPACT ON THE MORALE OF LOCAL OFFICERS WOULD BE NEGATIVE.
4 WE HAVE FURTHER CONSIDERED THE DIFFICULT ISSUE OF LOCAL PENSION SAFEGUARDS REFERRED TO IN PARAGRAPH 4 OF TUR. WE HAVE INDEED BEEN CONSIDERING A LIMITED PARTIAL FUNDING ARRANGEMENT UNDER WHICH A SUM MIGHT BE SET ASIDE IN A SPECIAL PENSION RESERVE FUND SUFFICIENT AT ANY TIME TO MEET ONE YEAR'S PENSION AND COMMUTED PENSION GRATUITY PAYMENTS. HOWEVER IT IS CONCEPTUALLY VERY DIFFICULT TO JUSTIFY SUCH A FUND. THE RIGHT TO A PENSION IS ENSHRINED IN THE LAW AND THE PAYMENT OF PENSIONS A STATUTORY FIRST CHARGE TO THE GENERAL REVENUE. PENSIONS ARE OF COURSE GUARANTEED IN THE JD AND THE BL, AND THEIR COST WILL ONLY AMOUNT TO BETWEEN 4 TO 5 PERCENT OF RECURRENT ANNUAL EXPENDITURE FOR THE FORESEEABLE FUTURE. IN THESE CIRCUMSTANCES IT IS DIFFICULT TO PRESENT A CONVINCING ARGUMENT FOR A ONE YEAR ROLLING FUND. FURTHERMORE IF SUCH A FUND IS TO PROVIDE A DEGREE OF COMFORT TO THE CIVIL SERVICE IT WOULD NEED TO BE INDEPENDENTLY MANAGED AND PREFERABLY HELD OFF SHORE. THE UNCERTAIN POLITICAL MESSAGE THIS WOULD SEND ABOUT THE STABILITY OF THE HK DOLLAR WOULD CERTAINLY HAVE SOME FALL-OUT. IN ADDITION THERE ARE LEGITIMATE CONCERNS ABOUT TYING UP FURTHER AMOUNTS OF THE RESERVES, IN THIS WAY PARTICULARLY SINCE THERE WOULD IN ALL LIKELIHOOD BE PRESSURE FROM
STAFF FOR A LARGER FUND.
5.
THIS ASSESSMENT NOTWITHSTANDING, THAT WE ARE COMMITTED TO REPORTING BACK TO THE EXECUTIVE COUNCIL BEFORE A FINAL DECISION IS TAKEN ON LOCAL PENSION SAFEGUARDS, AND TO FURTHER DISCUSSION
WITH THE CHINESE.
6. THE EXISTING LOCALISATION POLICY HAS SERVED US WELL TO DATE BUT WE ARE AWARE THAT IT MAY NEED TO BE REVIEWED. WE ARE CURRENTLY CONTEMPLATING ONE SPECIFIC CHANGE, NAMELY THE POSSIBILITY OF APPLYING THE LOCALISATION POLICY TO CONTRACT RENEWAL IN THE CASE OF OVERSEAS OFFICERS ON AGREEMENT TERMS IN THE POLICE FORCE AND THE ADMINISTRATIVE SERVICE WITH EFFECT FROM A FUTURE DATE. THERE ARE 6 AOS IN THIS CATEGORY AND 225 POLICEMEN. THESE OFFICERS HAVE HAD AMPLE OPPORTUNITY TO TRANSFER TO PENSIONABLE TERMS AND ENROL ON HMOCS IF THEY WISHED TO DO SO.
7. WE WOULD SUGGEST HOWEVER THAT FURTHER DEVELOPMENT OF THE LOCALISATION POLICY NEEDS TO BE DEALT WITH IN THE GENERAL CONTEXT OF DISCUSSIONS WITH THE CHINESE ABOUT FILLING THE FUTURE
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