TNAG-2425-FCO40-3527-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 59

CONFIDENTIAL

PAPER FOR DISCUSSION WITH STAFF

PENSION SAFEGUARDS

General Statement

1.

Hong Kong

Government

believes that

pensions

are

secure. Pensions are both a statutory right, and a statutory

charge on the General Revenue. The Joint Declaration and the

Basic Law provide that this legislation will continue in

force after 1997. They also contain specific guarantees that

SARG shall pay pension benefits due to pensioners

irrespective of nationality or place of residence, on terms

no less favourable than before.

In practice, Government

the

should have little difficulty in discharging its legal

pensions obligations.

twelve years is forecast to represent only about 4% 5% of

Government's recurrent annual operating expenditure.

Pensions expenditure over the next

2.

security,

In view of staff's concerns on the issue of pension

the Administration has considered various proposals

for pension safeguards which include

(a)

an hypothecated pension fund scheme; and

(b)

higher commutation of pensions;

(c)

(d)

a Provident Fund Scheme for civil servants;

partial funding of pensions.

CONFIDENTIAL