}
2 -
Consultancy Study
on the Hypothecated Pension Fund Scheme Option
OBJECTIVE
3.
The objective is to secure a portion of the value of
the future pension (the lump sum) against the risk of a
serious devaluation of the Hong Kong dollar. The Consultant
pointed out that the unequivocal undertaking in the Joint
Declaration by the Chinese ensures continued payment of Civil
Service pensions after 1997 by the Hong Kong Special
Administrative Region Government (SARG). His study does not
possibility of default in payment of
therefore address the
pensions.
BASIC PRINCIPLES
4.
pension
The Consultant proposed that the commuted lump sum
entitlements of civil servants could be vested in a
"notional corporation" which could raise funds from the
capital markets in the form of zero coupon bonds, backed by
the future flow of lump sum payments. The funds raised would
be invested in a portfolio of conservatively managed foreign
currency assets
cash deposits).
(most likely fixed interest securities and
Provided that the borrowing could be
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