Higher retirement age for civil servants a costly drain

PUBLISHED : Sunday, 07 June, 2015, 12:01am
UPDATED : Sunday, 07 June, 2015, 12:01am

The government has decided to raise the retirement age for new civil servants appointed on or after June 1 to 65 for the civilian grades and 60 for the disciplined services grades. This practice is deemed appropriate to respond to falling labour supply and increasing life expectancy.

However, opinions are divided on whether the Civil Service Bureau should raise the retirement age for the incumbent civil servants as well. In my view, raising the retirement age for them will bring adverse effects to the civil service and the government.

Quality of civil service will be affected by a block in the civil service's career ladder. With the incumbent civil servants' retirement age raised, they can occupy key and high positions for a longer period.

Those on the lower rungs and new recruits will be less satisfied and discouraged, with fewer opportunities to climb the career ladder. As workloads and demand from the public increase, it is believed fewer talented teenagers will be eager to join the civil service. As a result, the quality of its work may suffer.

It is a huge financial burden to let all incumbent civil servants retire at the age of 65. Those who were appointed before June 1, 2000 enjoy fringe benefits ranging from monthly mortgage allowances and pensions, to education allowances.

Basically, the amount and value of the fringe benefits are determined by length of service and rank. For example, civil servants (appointed before June 1, 2000) on Point 44 of the Master Pay Scale (MPS44) upon retirement can enjoy a lump-sum gratuity of HK$5.13 million, plus monthly pensions of HK$30,530.

At 65, they will be on MPS49 upon retirement and enjoy a lump-sum gratuity of HK$6.12 million plus monthly pensions of HK$36,446.

Raising the retirement age for incumbent civil servants' expenditure is catastrophic to the public financial health.

In conclusion, only keeping the incumbents' retirement age at the current level can facilitate circulation of fresh blood within the civil service and maintain morale for younger civil servants, while saving public funds on fringe benefit expenditure.

Keith Lee, Tsuen Wan