APPENDIX I

Letter of 30^th October 1997 to the Deputy Secretary for the
Civil Service conveying the Commission's views and recommendations
on the provision of civil service fringe benefits

30^th October 1997

Mr Duncan Pescod
Deputy Secretary for the Civil Service
Civil Service Bureau
Government Secretariat
Hong Kong

Thank you for attending the 295th meeting of the Commission held on 9th October 1997 at which the Commission considered at great length the Administration's report on Civil Service Fringe Benefits.

In the course of discussion, the Commission expressed disappointment with the Administration's practice of "non-deprivation of existing benefits" which, Members considered, is out of line with the practice in the private sector where old arrangements are invariably superseded by new ones introduced later on. Members were also concerned that the Administration's clearly stated position that it could not take any benefit away from serving officers would restrict the Commission in giving advice on whether the Administration should be asked to undertake further research on any aspects highlighted in the report.

Notwithstanding all these considerations, the Commission felt that as reflected by the various comments made by Members at the meeting, there is clearly scope for further improvement in such areas as pension and housing. To this effect, the Commission would, therefore, like to invite the Administration to give further consideration to these issues and to report back to the Commission in say, six months to a year's time.

In addition, it is the consensus view of Members that the new Common Terms, to be implemented by Government in 1998, would provide a good opportunity for the Administration to change some of the existing benefit provisions. The Commission, therefore, recommends that the Administration should make good use of this opportunity to effect the necessary changes.

I have been asked by the Commission to convey to you their concern and recommendation as set out above. A copy of the relevant extract of the minutes of the 295th meeting of the Commission is attached herewith for your information and retention.