prospect and
3. The purpose of the compensation is to compensate for the loss of the Secretary of State's protection. The LCS "half" and "full" factors were calculated to compensate for specific packages of lost remuneration and benefits. A convenient approach to the present problem (but no more than this) is to adopt scales of factors which are interpolated between the "full" and "half" LCS factors.
4.
There are different LCS factors for NPAs of 55 (lowest), 60, and 65 (highest). Officers have options by which they may be able to change their NPA. A lower NPA reduces compensation costs in two ways: the officer may retire before 1/7/97, and the compensation factors applicable at 1/7/97 is lower. As officers may exercise their options so as to increase their compensation, it is best not to adopt NPAs which could be too low. In our preliminary work, we have assumed that NPA is 60 for all HMOCS, except police officers for whom NPA is assumed to be 55.
5.
The most recent detailed salary data which we have from Hong Kong shows 975 serving and potential HMOCS officers as at November 1991. On the assumptions set out above, 176 of these officers would retire before 1/7/97, leaving 799 above NPA. The estimated cost of paying "full" scale compensation to these officers is about £74 million at 91/92 prices.
6. We know from more recent summary information from Hong Kong that the numbers of HMOCS have already fallen since November 1991. In addition, some officers will not be eligible for compensation in 1997 because they will be eligible for LCS. Papers from Hong Kong suggest that 435 HMOCS might be eligible for compensation in 1/7/97. The cost of paying "full" scale compensation to 435 officers might be about £40 million at 91/92 prices. If the total expected cost is to be less than £39 million, this would suggest compensation factors only slightly less than the "full" LCS factors. (I have assumed that the figure of £39 million is at 91/92 prices and will be increased in line with the UK RPI. Please let me know if this is wrong.)
7.
These results do not depend on salary movements after January 1992, but they do depend on the numbers of HMOCS who will be eligible for compensation and their NPAs. figures will not be known for certain until 1997.
would be useful to get firmer figures for
-
These However, it
the current numbers of serving and potential HMOCS
officers in the different employment categories, showing
the highest NPA for which they can opt, and
- how many are eligible under the LCS.
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