LegCo Panel on Public Service
Civil Service Fringe Benefits
Members have asked to be informed of the present provision of fringe benefits to civil servants, the mechanisms for review, the changes that have recently been introduced or are contemplated, and the rationale for such.
2. Civil service conditions of service/fringe benefits can be broadly divided into three categories :
- those which apply as conditions of service (i.e. as a right) for the categories of staff eligible e.g. pension, medical benefits, dental benefits, education allowance, leave, and housing benefits for senior staff;
- grade specific fringe benefits approved on a case by case basis e.g. the provision of departmental or operational quarters to certain staff of the disciplined services and the Housing Department; and
- those which are discretionary benefits (i.e. if resources are available, the benefits will be granted) e.g. housing allowance for junior staff.
The detailed conditions of service/fringe benefits for individual officers are dependent on their rank, seniority, length of service, terms of appointment (permanent or agreement, overseas or local) and other rules.
3. Of the conditions of service/fringe benefits mentioned above, retirement and housing benefits are the most significant ones.
4. We operate two pension schemes for civil servants who are not on agreement terms and not judicial officers. Both schemes are non-contributory. The two schemes are the Old Pension Scheme (OPS) applicable to those who were appointed to the civil service before 1 July 1987 and the New Pension Scheme (NPS) applicable to those who were appointed or re-appointed to the civil service on or after 1 July 1987, and those who were appointed before that date and who had before 31 December 1995 exercised their option to join the scheme.
5. The main differences between the two schemes are that under the OPS the normal retirement age is 55 and the maximum commutation of pensions into a lump sum is 25%, whereas under the NPS the normal retirement age is 60 and the maximum commutation of pensions into a lump sum is 50%. The maximum pension under both schemes is two thirds of the highest annual pensionable emoluments after 33.3 years of pensionable service under the OPS and 37.5 years under the NPS. Officers under the NPS who resign after completing not less than 10 years continuous qualifying service will be eligible for a deferred pension at normal retirement age, whereas officers resigning under the OPS receive nothing.
6. We also have provisions for death benefits to officers who die while in service not arising out of their employment. For officers killed or permanently injured whilst on duty, there will be further compensation under the Hong Kong pensions legislation or the Employees Compensation Ordinance.
7. There is currently a number of different housing benefits the major ones being the Home Purchase Scheme - a discretionary scheme available to officers below MPS 34 and which about 12,000 officers are currently drawing - and the Home Financing Scheme, a contractual right for officers at or above MPS 34 which some 7,600 are currently drawing. The entitlement under both schemes is limited to a maximum of 120 months.
8. There is also a Housing Loan Scheme applicable to eligible officers appointed before 1 October 1990 who have completed at least 10 years of service which will qualify them for a pension/annual allowance and an Accommodation Allowance (AA) Scheme applicable to overseas officers appointed on or after 1 October 1990. Non Departmental Quarters and Private Tenancy Allowance (PTA) are only applicable to officers appointed before 1 October 1990. The number of officers drawing these benefits is relatively few.
9. The provision of civil service housing benefits is governed by the prevention of double benefits rules. In other words, an officer may only receive one housing benefit at any one time. A married officer and his/her spouse may not receive more than one housing benefit at any one time, irrespective of whether or not it is provided by the Government. In addition, an officers entitlement of housing benefits may also be limited if his/her spouse has previously received housing benefits from Government or Government subvented organisations.
10. Apart from the benefits above, we also provide medical and dental benefits to all employees (except daily rated staff) and retired pensioners, their spouse and unmarried children below the age of 19 or below the age of 21 if they are in full time education or vocational training or are dependent on the employees as a result of physical or mental infirmity. The benefits include free medical and dental advice and treatment at Government and Hospital Authoritys clinics and hospitals. A fee is payable for hospital maintenance, dentures, dental appliances and other restorations.
11. Employees are eligible for vacation leave or annual leave in accordance with their respective terms of appointment. Those with four years service may be granted sick leave of up to 182 days on full pay and 182 days on half pay in any period of four years. Full pay maternity leave of up to ten weeks is also provided for female employees appointed for not less than 40 weeks and with less than three surviving children. Local directorate officers and overseas officers are eligible for leave passages and the entitlements vary according to their terms of appointment and pay point.
12 In addition, all employees are eligible for a Local Education Allowance on a reimbursement basis. Officers on permanent terms and those on agreement terms with such provision in their contracts are also eligible for an Overseas Education Allowance for sending their children to United Kingdom or country of origin for education (but see paragraph 18 below).
13. There are also other measures which, as a good employer, we try to provide. These include advance of salary in specified circumstances, provision of funds for organising sports activities and for welfare purposes etc.
14. Because many fringe benefits are related to the current cost of items or to inflation, many have formulae, approved by the appropriate authorities for making adjustments. Thus the real value of pensions is maintained through an annual adjustment to reflect changes in CPI(A) - as provided for in the Pensions Ordinances. The rates of housing and education allowances are also reviewed regularly in accordance with formulae agreed by the Finance Committee. As regards the PTA and AA rates, some concern has recently been expressed as to why these were reduced in April 1996. However, the agreed adjustment mechanism is to reflect changes in rental market, which had gone down in the period under review.
15. In addition, every year the Pay Survey and Research Unit under the Standing Commission on Civil Service Salaries and Conditions of Service conducts a Fringe Benefits Survey to provide comprehensive data on private sector fringe benefits for use in evaluating the current provision of civil service conditions of service/fringe benefits. Both we and the Standing Commission consider these carefully.
16. Before introducing any fundamental changes to the provision of benefits, we will consult the Staff Sides of the four central consultative councils (Disciplined Services Consultative Council, Model Scale 1 Staff Consultative Council, Police Force Council, and Senior Civil Service Council) as well as the four independent advisory committees (Standing Commission on Civil Service Salaries and Conditions of Service, Standing Committee on Directorate Salaries and Conditions of Service, Standing Committee on Disciplined Services Salaries and Conditions of Service, and Standing Committee on Judicial Salaries and Conditions of Service) as appropriate.
17. The two most significant changes implemented in recent years were the introduction of the New Pension Scheme in 1987, and the Home Financing Scheme in 1990 - with the subsequent improvement to the scheme in 1994. In 1993, we also modernised the Dependent Pension Benefits for all civil servants and removed anomalies and discriminatory provisions. We have also reduced the conditions hours for MOD I staff (1988), extended the Home Purchase Scheme (1990) and Housing Loan Scheme (1995) to them and improved their leave earning rates (1991). We have also supported efforts to provide a voluntary private medical insurance scheme for civil servants and this was introduced last month. This is an entirely voluntary scheme - paid for by the individual civil servant - and has no impact whatsoever on their eligibility for civil service medical benefits nor our provision of such.
18. We shall cease the provision of Overseas Education Allowance to new recruits who are offered appointment on or after 1 August 1996.
19. The Employment (Amendment) Bill recently introduced into the Legislative Council has proposed a number of improvement to the existing statutory provisions regarding maternity protection. Upon passage of the Bill, suitable amendments to the existing Civil Service Regulations (CSRs) will be introduced.
20. As regards our proposals to staff to amend certain CSRs on salary advances, this was an initiative both to remove some allowances which were out of date and not used and to increase the limits on some which were cash figures and had thus been eroded by inflation. We are still in discussions within the administration over some counter proposals by staff.
Civil Service Branch
July 1996
Last Updated on 21 Aug, 1998
