Higher retirement age for civil servants mustn't harm public interest

Joseph Wong applauds the government's plan to raise the retirement age for civil servants, but says the conditions set for the new limits must be clearly spelled out to protect public interests

PUBLISHED : Monday, 07 April, 2014, 6:02pm
UPDATED : Tuesday, 08 April, 2014, 4:41am

The government's proposal of a higher retirement age for newly hired civil servants and more flexible post-retirement opportunities for those already serving have far-reaching implications across society.

Unlike some developed countries, Hong Kong has no mandatory retirement age. Most private-sector employees retire at 60, which is the retirement age set for civilian grades in the civil service (while the disciplined services retire at 55, or 57 for senior ranks). Yet, under the Mandatory Provident Fund scheme applicable to all employees except the lowest-paid, the stipulated age for the withdrawal of accrued benefits is 65. Added to this anomaly is the fact that Hong Kong's population is ageing fast, with one in three expected to reach 65 and above by 2041.

Against this background, it makes sense for the government to propose a higher retirement age for recruits. The plan is to raise the limit to 65 for civil servants in civilian grades, and 57 for officers in the disciplined services grades. The latter may also be allowed to work until 60, provided they pass the relevant assessments and physical fitness test.

The present retirement age for civil servants was fixed in 1987, 27 years ago. In 1987, life expectancy in Hong Kong was 74 for men and 80 for women. Now it is 81 and 87 respectively. So a higher retirement age is clearly justified in demographic terms. It is certainly not high when compared with, say, Taiwan, which has a mandatory retirement age of 65. In other places in the region, most people work beyond 60 and the trend is to raise the retirement age beyond 60.

Based on the projection of the number of retirees in the civil service - that is, an annual average of 4.4 per cent of civil service strength for the five-year period from 2017-18 to 2022-23, and declining to 3.4 per cent for the next five years ending 2027-28 - I agree with the Civil Service Bureau that there is no justification to extend the retirement age of serving civil servants across the board, as the government did in 1987.

Instead, the government has proposed a package of further employment opportunities for civil servants reaching their normal retirement age. This is a matter of public interest that deserves examination and comment.

The proposal to allow heads of departments or grades to grant an extension of service of up to five years to current officers reaching retirement age, compared with the present limit of one year, is a significant relaxation. It is right for the Civil Service Bureau to stipulate that the proposed extension will be subject to relevant conditions such as "well justified operational and/or succession needs, no undue promotion blockage, good performance and physical fitness, and periodic review of the duration of further employment".

But this is not enough to safeguard against possible favouritism by heads of departments in exercising their authority, or to remove the suspicion of those officers whose applications are rejected. Tighter rules, at least for the first five years, and subject to review in the light of experience afterwards, would be useful.

These could include: extensions to be granted on an annual basis; endorsement by the secretary for the civil service for the third extension and beyond; officers whose applications are rejected or who are concerned that their promotion may be blocked could appeal to the bureau; and general oversight of all extensions by the independent Public Service Commission. Further, the consultation paper has also put forward a new "Post-retirement Service Contract Scheme".

Under the scheme, the government may employ retired civil servants on contract terms "to perform ad hoc time-limited tasks which require civil servant expertise and/or experience, but cannot be undertaken by civil service established posts because of the urgent or part-time nature of the jobs".

Unlike recruits to the civil service or staff appointed under the current Non-Civil Service Contract Scheme, retirees employed under the proposed scheme would not have to go through an open and competitive recruitment process. This major departure from Hong Kong's way of doing things, carrying with it risks of abuse of authority, can only be justified if the exceptional circumstances set out in the consultation paper can be clearly defined in the implementation rules.

In this respect, further thought must be given to what constitutes "urgent", the initial time-limit of an ad hoc task, the total duration of a "part-time" job, and so on.

I also suggest that the bureau and Public Service Commission should play an active role in monitoring and overseeing the new scheme, and the government should file periodic reports to the Legislative Council public service panel for review, similar to what it has been doing with the Non-Civil Service Contract Scheme.

In relaxing the rules for further employment within the civil service, the government has also taken the opportunity to relax the rules on post-retirement employment in the private sector for non-directorate civil servants at junior ranks. At present, low-skilled civil servants are already given blanket permission to take up outside work immediately after retirement. It is appropriate to extend this policy to other junior frontline and supporting civil servants.

But while the consultation paper's suggestion to draw a line on the basis of a certain pay point looks reasonable, it would be prudent to consider whether some civil servants should not enjoy such blanket permission because they have had access to certain sensitive information in the course of their duties.

In general, the proposal to set a higher retirement age is well justified and should be implemented as quickly as possible. While the other proposals to provide further employment opportunities for serving civil servants are sound in principle, we should reserve final judgment until we are satisfied that the implementation details provide sufficient safeguard to protect the interests of civil servants and the public at large.

Joseph Wong Wing-ping, a former secretary for the civil service, is a political commentator