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In any costing or projections now required, we would draw heavily on the previous work done. We are familiar with the provisions of the scheme, and already have the systems established to facilitate processing the calculations. The actuarial assumptions used for the previous work are also available in our system, although some minor up- dating changes may be necessary.
Possible Up-to-date Assessment
The fee charged for an up-to-date assessment of the pension liabilities would depend on the scale of the work requested by the Hong Kong government. As a minimum, Hong Kong are presumably interested in obtaining a basic projection of the size and timing of pension scheme payments after 1997 in respect of Hong Kong civil servants. As indicated above, I imagine that this information would be useful to both Hong Kong and the United Kingdom in the run up to 1997, and to the successor administration for pensions planning after 1997. However, it may be that Hong Kong envisage a full actuarial investigation, including an analysis of experience under the present scheme, an assessment of the value of the pension arrangements, and perhaps the possibility of switching to a funded scheme and/or a more explicit charging mechanism for superannuation cost. It may be helpful to identify separately the anticipated fees for the basic projections, and for a full scale investigation.
Basic Projection
If the purpose of the review is to obtain an informed assessment of the projected pension expenditure in the years after 1997, then the work involved can broadly be classified into the following stages:
(a)
Data Hong Kong would provide GAD with data about the schemes and their members at a convenient date (for example, possibly 31 December 1992). We assume that the format in which the data would be provided would be broadly the same as for the 1984 investigation, ie data grouped by age and member classification. GAD would make a simple check of the data received for internal consistency and consistency with data previously supplied, but would not scrutinise data for individual employees.
It would clearly be sensible for the projections to take account, as far as possible, of decisions exercised by members in relation to the options available to them. These options include the choice of officers to switch from the old pension scheme to the new pension scheme, and the choice for some contract officers electing to switch from a gratuity basis to pensionable status.
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