TNAG-2429-FCO40-3531-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 156

CONFIDENTIAL

SUB-COMPONENT: HMG TO UNDERWRITE NON-COMMUTABLE ELEMENT

HMG to under-write only non-commutable element of pensions, paying supplements in respect of these as under Options A, B, C and D above.

POTENTIAL COST:

Would depend on number of officers opting for new or old pension schemes (ie 25% or 50% commutable) and on trigger-point chosen in respect of Options A and B. In the best case the potential cost could be a little more than 50% of potential costs under Options A, B, C and D.

Advantages:

(a)

Reduced contingent liability

(b) Could complement private sector schemes if developed

Disadvantages:

(a)

Illogical to protect only a proportion of an officer's pension benefits, unless a private sector scheme could protect the commutable element.

options.1.

SLM

CONFIDENTIAL 10