SCS's Letters to Colleagues

I write to update you on the Administration’s decision to extend the service of civil servants as announced by the Chief Executive in the Policy Address today.

Background

Against the backdrop of ageing population, shrinking labour force and higher number of civil service retirees in the coming ten years, the Civil Service Bureau (CSB) has assessed the manpower and retirement situation in the Civil Service in the coming years and examined possible options for extending the service of civil servants after their retirement.  Subsequently, CSB released on 3 April 2014 a consultation paper on “Extension of the Service of Civil Servants” (the “Consultation Paper”) for a four-month consultation until 2 August 2014.  In the Consultation Paper, we have put forth a flexible retirement and employment package embracing the following four initiatives –

1. raise the retirement age of civil service new recruits as from a future date;
    
2. adjust the further employment mechanism to provide more flexibility to retain experienced serving civil servants who have reached retirement age so as to meet specific operational and succession needs;  
3. introduce a new “Post-retirement Service Contract (PRSC) Scheme” to engage retired civil servants on contract terms to undertake ad hoc duties; and  
4. streamline the control regime on post-service outside work to facilitate civil servants to take up outside work after retirement, if they so wish.

During the consultation period, a total of 371 submissions were received from the public (including individuals claiming themselves as civil servants), the grade/departmental management, the staff side of Departmental Consultative Committees, civil service staff bodies and non-civil service parties concerned through different consultative platforms.

In sum, the majority of respondents agree, or have no in-principle objection, to the proposed direction of extending the service of civil servants.  They generally concur that the proposal will enable the Government to keep pace with the demographic changes of society, provide flexibility to meet the operational and succession needs of individual grades/departments, and meet the aspirations of different cohorts of civil servants.  On the other hand, quite a number of respondents from the public and individuals claiming themselves as civil servants consider that the service of civil servants should not be extended to avoid possible adverse impacts on the promotion prospects of serving officers, employment prospects of younger generations, performance standard of the Civil Service and/or public finance.  Further details are set out in Annex A.

Way forward

We have critically assessed the feedback received through the consultation.  We have also commissioned a consultant to conduct an actuarial study on the financial implications of the proposal of raising the retirement age for new recruits.  Having regard to the outcome of the above analyses and following consultation with the Executive Council, we have decided to adopt the four initiatives proposed in the Consultation Paper with suitable refinements and/or appropriate mechanisms. 

Specifically –  

1. we plan to raise the retirement age of new recruits joining the Civil Service from mid-2015 to:
   1. 65 in respect of the civilian grades;  
   2. 60 in respect of the disciplined services grades, regardless of their ranks;  
2. in connection with the implementation of the new retirement age in (a) above, the scale of the Government’s contributions to the Civil Service Provident Fund (CSPF) Scheme for new recruits joining the Civil Service will be revised to keep the Government’s overall financial commitment within 18% of the salary cost;   
3. the present mechanism for further employment of civil servants beyond retirement age will be adjusted by:  
   1. institutionalising the selection process by reference to the modus operandi for promotion and recruitment;
   2. allowing a longer period of further employment up to a maximum of five years beyond the normal/prescribed retirement age;  
   3. relaxing the approval criteria for further employment; and  
   4. extending the coverage of further employment to officers appointed on New Permanent Terms in the form of extension of CSPF service;  
4. a new PRSC Scheme will be introduced for bureaux/departments to engage retired civil servants on contract terms, on a targeted basis, to undertake ad hoc duties (including time-limited or part-time ones) which require specific civil service expertise or experience; and  
5. the blanket permission for taking up post-service outside work after retirement will be extended to cover some 150 junior ranks of non-directorate civil servants whose maximum pay points do not exceed Master Pay Scale Point 20 or equivalent.

Salient points are set out in Annex B.

While the above initiatives may not fully meet the aspirations of all colleagues, we believe they present the most pragmatic means to – 

1. enable the Civil Service to keep pace with the demographic changes of society to better respond to the economic and social challenges arising thereof, and to set an example to the private sector and other public bodies to follow;  
2. address the different operational and succession needs of individual grades/departments and maintain effective management of the Civil Service; and  
3.  balance the interests of different cohorts of civil servants.  

Next steps

Our target is to raise the retirement age for new recruits joining the Civil Service from around mid-2015 and formulate implementation details for the remaining initiatives.  To this end, CSB will, in consultation with grade/departmental management, staff sides and other relevant parties, hammer out the implementation details, guidelines, necessary amendments to Civil Service Regulations, etc.