TNAG-2425-FCO40-3527-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 107

it would be very difficult to justify setting aside funds on

this scale for the benefit of a small section of society.

23.

However,

it may be possible to overcome

constraints, if the size of the

the

financial and political

reserve fund is scaled down to cover one, year's pension

expenditure only. Initially $3 billion would be required to

set up the fund in 1992/93, with some annual topping up

thereafter.

Arı estimate of the costs of a one-year roll

forward reserve fund is at Annex D.

24.

Although not the complete answer, there are

advantages in a one-year roll forward pension reserve fund.

First it would demonstrate that the Administration has

addressed staff concerns, and this would provide an important

psychological boost to the Civil Service. It would provide

some additional safeguards and security of pensions for all

serving officers and pensioners; and could also provide` a

The

useful cushion upon which to draw in lean years.

proposal does not involve any changes to present retirement

arrangements, although some legislative amendments would be

necessary in connection

with the establishment of the fund.

It would not encourage

service early. A partial funding option also appears to have

the support of the Chinese in principle, although they might

well argue for a larger two to three year roll forward

or facilitate officers to leave the

reserve.