For discussion FCR(95-96)123
on 9 February 1996
ITEM FOR FINANCE COMMITTEE
HEAD 148 - GOVERNMENT SECRETARIAT :
FINANCIAL SERVICES BRANCH
Subhead 001 Salaries
Members are invited to approve the following changes in establishment of the Financial Services Branch (FSB) -
- creation of the following supernumerary directorate posts for the period from 1 March 1996 to 28 February 1997-
1 Administrative Officer Staff Grade B1
(D4) ($126,100 - $129,950)
1 Administrative Officer Staff Grade C
(D2) ($95,550 - $101,450)
1 Assistant Commissioner of Insurance
(D2) ($95,550 - $101,450)
1 Principal Executive Officer
(D1) ($80,450 - $85,400); and
- an increase in the ceiling placed on the total notional annual mid-point salary value of all non-directorate posts in the permanent establishment of FSB in 1995-96 from $58,027,000 by $8,075,340 to $66,102,340 to permit the creation of 21 non-directorate posts.
The Financial Services Branch (FSB) requires additional staff to enable it to proceed immediately with the preparation of subsidiary legislation of the Mandatory Provident Fund Schemes Ordinance (MPF Ordinance) and other urgent tasks relating to the development of the Mandatory Provident Fund (MPF) System.
2. The Secretary for Financial Services (SFS) proposes to set up a Mandatory Provident Fund Office (MPFO), initially for 12 months commencing 1 March 1996. The Office would comprise four directorate staff and 21 non-directorate staff in FSB who would work alongside with the consultants staff in an integrated organisation. The four supernumerary directorate posts are -
- one Administrative Officer Staff Grade B1 (AOSG B1);
- one Administrative Officer Staff Grade C (AOSG C);
- one Assistant Commissioner of Insurance (ACI); and
- one Principal Executive Officer (PEO).
3. The MPF Ordinance was passed in July 1995. It provides for, among other things, the establishment of non-governmental mandatory provident fund schemes for the purpose of funding benefits on retirement, the registration of such schemes, the setting up of a regulatory regime and the establishment of the Mandatory Provident Fund Schemes Authority (MPFA) to oversee the administration and management of registered schemes.
4. These tasks require substantial input both at the policy and technical levels. Having regard to the complexity of the issues involved and the workload implications, SFS considers that it is not possible for the existing staff of FSB to absorb the tasks. He therefore recommends setting up an MPFO in order to take the implementation of the MPF Ordinance forward. The proposed structure of the MPFO is at Enclosure 1. The existing and proposed structure of FSB are at Enclosures 2 and 3 respectively.
5. The MPFO will be staffed by a mixed team of civil servants and consultants staff who will be engaged under a consultancy contract for providing professional services for assisting in the development of the subsidiary legislation of the MPF Ordinance. In drawing up the subsidiary legislation, the MPFO will carry out wide consultation so as to ensure that the MPF System is widely understood by the community and operationally feasible. To facilitate the consultation work, SFS will set up a number of advisory bodies, including a Mandatory Provident Fund Advisory Board with non-official members to advise Government on policy issues pertaining to the MPF Schemes, and various Specialist Groups with professionals in the market as members to provide advice on the technical aspects of the MPF Schemes.
6. The proposed MPFO will be headed by an AOSG B1. He will be underpinned by three directorate officers comprising one AOSG C, one ACI and one PEO. The proposed AOSG B1, designated as Director, MPFO, will be responsible to SFS for -
- ensuring the smooth running of the MPFO staffed by a mixed team of civil servants and consultants staff;
- ensuring the effective and efficient preparation of the draft subsidiary legislation;
- co-ordinating concerted effort between various branches and departments in completing the tasks of the MPFO;
- making sure that there will be wide and thorough consultation on key issues at the appropriate level;
- promoting private sectors active participation in the setting up of the MPF System;
- providing steer in resolving controversial issues in the course of the development of the subsidiary legislation; and
- taking a leading role in the development of preliminary ideas on the establishment, organisation, and operation of the future MPFA.
7. To perform the duties of the Director, MPFO, the incumbent needs to have sufficient seniority and extensive administrative experience to be able to deal with the financial services sector at senior levels and co-ordinate effectively with not only various branches and departments but also the private sector. The incumbent will also need to tackle controversial issues that may arise. Possible examples of such issues include the need to strike a balance between the conflicting interests of the employers and the employees, and to deliberate on the new standards required of service providers. SFS therefore proposes that the post be pitched at AOSG B1 level (D4). The job description of the proposed Director, MPFO post is at Enclosure 4.
8. The Assistant Director (Scheme Operations) (AD/SO) will be responsible primarily for the preparation of subsidiary legislation regarding key aspects of the operation of MPF Schemes, including contribution, preservation, portability, withdrawal of benefits, registration and monitoring of MPF Schemes and Residual Provident Fund Schemes. In addition, he will be responsible for drawing up details for establishing the Compensation Fund and the MPF Appeal Board. To discharge these responsibilities, the incumbent of the post of AD/SO needs to be well-versed in policy formulation and have good administrative experience. SFS therefore proposes that an AOSG C post be created to carry out these duties. The job description of the proposed AD/SO post is at Enclosure 5.
9. SFS proposes that the AD/SO be supported by two Administrative Officers (AO), one Senior Insurance Officer (SIO) and two Insurance Officers (IO), in addition to the five consultants working on the subsidiary legislation. The whole team will provide AD/SO with support in various technical areas as well as support in policy issues relating to the preparation of submissions to the Executive Council, Legislative Council and relevant panels and committees, and the finalisation of drafting instructions for the subsidiary legislation. The team will work closely with the Specialist Groups and the Law Draftsman.
10. Members may wish to note that the team proposed in the preceding paragraph exceeds that proposed for consideration by the Establishment Subcommittee (ESC) on 13 December 1995 by one AO post. SFS proposes this change in order to address the concern raised by some Members of the ESC about possible delay in completion of the work of the MPFO given the tight time frame. The change is also needed in view of the delay for about two months in the establishment of the MPFO from January 1996 to March 1996. He feels that enhancing the administrative support to AD/SO will better enable the latter to maintain a close supervision of the overall work schedule of the Office and help to ensure timely completion of the work targets which include completing all the necessary draft legislation relating to the MPF System by the end of 1996.
11. The Assistant Director (Regulatory Standards) (AD/RS) will be responsible primarily for the preparation of subsidiary legislation governing trustees, investment and interface with the Occupational Retirement Schemes Ordinance (ORSO). His major tasks relate to the operation of pension trustees, investment managers and retirement schemes service providers. Having regard to the technical nature of the issues under his portfolio, the incumbent of the AD/RS post needs to have in-depth professional knowledge and hands-on experience in pension and retirement schemes matters, and possess experience in prudential supervision of financial institutions and management of retirement schemes. He should be familiar with the operation of pension trustees, investment managers, and other retirement schemes service providers. Such knowledge and experience are necessary for assessing the implications of the MPF System for the industries. SFS therefore considers that the incumbent should either be an actuary or accountant by profession. Having regard to these requirements, SFS feels that the appropriate grading and ranking of the post should be at the ACI level (D2). The job description of the proposed AD/RS post is at Enclosure 6.
12. The AD/RS will be supported by one AO, one SIO, two IOs and five consultants. The major tasks of the whole team include developing criteria for approval of trustees and other regulatory details to enable effective prudential supervision of the trustees, drawing up restrictions on investment and guidelines on investment practices, working out the interface arrangements between the MPF Schemes and existing schemes under the ORSO and giving technical advice to the Director on matters pertaining to the operation of the MPF System.
13. The proposed Principal Executive Officer (Administration and Planning) (PEO/AP) will head the Administration and Planning Division which is responsible for providing the necessary administrative support for the MPFO and, more importantly, advising the Director on the institutional back-up for the regulation of MPF Schemes. For example, he will need to co-ordinate with the two Assistant Directors in developing preliminary ideas on the institutional arrangements for monitoring the administration of MPF Schemes and prudential supervision of service providers. The work involved includes developing ideas on the structure and operation of the future MPFA, co-ordinating efforts in developing technical specifications of the computerised management information system, and mapping out preliminary human resource policy for staff of the future MPFA. In addition, he will assist the Director in carrying out a major review of the work progress of the MPFO scheduled for mid-1996 with a view to assessing the way forward for establishing the MPFA. The PEO/AP will also be required to service the Mandatory Provident Fund Advisory Board. The job description of the proposed PEO/AP post is at Enclosure 7.
14. In discharging his responsibilities, the PEO/AP will need to co-ordinate with branches and departments at directorate level on matters related to the setting up of the MPFA. Given the crucial role of the post, and the required line of co-ordination, SFS considers that the incumbent needs to possess extensive knowledge of and experience in departmental administration, human resource, finance and budgeting matters, etc. He should also be of sufficient seniority in the Executive Officer Grade to be able to play an effective role in co-ordinating planning efforts in setting up the future MPFA. SFS therefore proposes to pitch the post at PEO (D1) level.
15. SFS will conduct a progress review in mid-1996 and make a report on the preparation of the subsidiary legislation to the Legislative Council Panel on Financial Affairs, in addition to other regular reports that the Panel may require from time to time. SFS will examine towards the end of 1996 the continued need for, and retention of, the above four directorate posts.
16. The preceding paragraphs have referred to the need for three AO, two SIO and four IO posts to underpin the AD/SO and AD/RS. In addition to these nine non-directorate posts, SFS proposes to create 12 non-directorate posts in different grades and ranks to provide the necessary administrative, technical, legal and general support. These 12 posts are: one Senior Crown Counsel (SCC) post for giving the necessary legal support and advice to the Director and two Assistant Directors on matters pertaining to the development of the subsidiary legislation; one Senior Executive Officer (SEO) post to assist the PEO in planning and public relations matters; one Senior Personal Secretary and two Personal Secretary I posts to provide secretarial support to the Director and the two Assistant Directors respectively; two Personal Secretary II posts to serve the PEO, SCC, SIOs, SEO and AOs; and lastly, one Chinese Language Officer I, one Clerical Officer II, one Typist and two Office Assistant posts to provide translation services and general support to the Office.
17. A list of all the non-directorate posts proposed for creation is at Enclosure 8. Subject to Members approval of this proposal, the 21 non-directorate posts will be created through the departmental establishment machinery.
18. The additional notional annual salary cost of the four supernumerary directorate posts at MID-POINT is $4,918,800 as follows -
|
Supernumerary post
|
$
| Number of post
|
|---|
|
Administrative Officer Staff Grade B1
|
1,559,400
|
1
|
|
Administrative Officer Staff Grade C
|
1,182,600
|
1
|
|
Assistant Commissioner of Insurance
|
1,182,600
|
1
|
|
Principal Executive Officer
|
994,200
|
1
|
|
Total
|
4,918,800
|
4 |
19. The total additional notional annual mid-point salary cost of the proposed 21 non-directorate posts is $8,884,080.
20. No provision has been included in the 1995-96 Estimates to meet the cost of this proposal. Should Members approve the proposal, supplementary provision required for 1995-96 will be approved under delegated authority and an equivalent amount will be deleted from Head 106 Miscellaneous Services Subhead 251 Additional commitments.
21. On 27 July 1995, the Legislative Council passed the Mandatory Provident Fund Schemes Bill, the enabling legislation outlining the main features of the MPF System. We aim to complete development of the subsidiary legislation by end-1996.
22. Following Members approval on 24 November 1995 of a commitment of $22 million for engaging consultants to provide the necessary professional support for the preparation of the subsidiary legislation under the MPF Ordinance, the Administration has considered the tenders of interested consultants. Subject to the completion of formalities which will be imminent, the selected consultant will be commissioned.
23. SFS needs to have adequate staffing resources to supervise and work alongside with the staff of the consultants. SFS plan is to sign the consultancy agreement and ask the consultants to start work as soon as Members have approved the present staffing proposal.
24. In fact, following the enactment of the MPF Ordinance, SFS set up within FSB a Working Group on MPF with a view to commencing preparation for the establishment of the MPFO and the appointment of consultants to work on the subsidiary legislation. For this purpose, he created on a supernumerary basis on 1 September 1995 four directorate posts (one AOSG B1, two AOSG C and one PEO) under delegated authority for a six-month period ending 29 February 1996.
25. The ESC considered on 13 December 1995 a staffing proposal similar to the present one. SFS decided to withdraw the proposal in order to reflect on ESC Members comments. To take account of these comments and having regard to the delay in the establishment of the MPFO, SFS has slightly revised the staffing proposal, as explained in paragraph 10 above. To maintain the momentum in the preparation of the subsidiary legislation, we need to set up the MPFO as a matter of urgency before the four supernumerary directorate posts referred to in the preceding paragraph lapse. Noting that Members will not be able to consider the proposal before end-February should we route it through the ESC, the Administration has decided to submit the present proposal to Members direct.
26. Civil Service Branch (CSB) agrees that, in order to take forward the proposal to establish the MPF Schemes, FSB needs considerable reinforcement. CSB agrees that the four proposed supernumerary directorate posts to man the MPFO up to February 1997 are required and justified. The grading and ranking of the proposed posts are appropriate.
27. CSB also supports the proposed increase in the ceiling placed on the total notional annual salary value to allow creation of non-directorate posts for the MPFO.
28. As the four directorate posts are proposed on a supernumerary basis, their creation, if approved, will be reported to the Standing Committee on Directorate Salaries and Conditions of Service in accordance with agreed procedures.
Financial Services Branch
February 1996
Enclosure 4 to FCR(95-96)123
Rank : Administrative Officer Staff Grade B1 (D4)
Post Title : Director, MPFO
Major Duties and Responsibilities :
To be responsible to the Secretary for Financial Services for -
- overseeing the running of the MPFO;
- developing subsidiary legislation on MPF;
- co-ordinating Governments effort in the setting up of the MPF System;
- setting up the MPF Advisory Board, Panel of Specialists and Specialist Groups; and undertaking consultation with relevant industrial, professional and political bodies;
- liaising with the key service providers on major issues pertaining to the setting up of the MPF System; and
- developing preliminary ideas on the institutional arrangement for monitoring the administration of MPF Schemes and prudential supervision of the service providers.
Enclosure 5 to FCR(95-96)123
Rank : Administrative Officer Staff Grade C (D2)
Post Title : Assistant Director (Scheme Operations)
Major Duties and Responsibilities :
To be responsible to the Director, MPFO for -
- giving advice and assistance in developing the MPF System;
- preparing proposal papers and reports relating to MPF Schemes for consultation with the industry and other organisations, and submissions to the Executive Council and Legislative Council;
- reviewing and formulation of proposals for the registration and regulation of MPF Schemes;
- formulation of draft drafting instructions for rules and regulations on the MPF System, including withdrawal of accrued benefits, administration, management and maintenance of MPF Schemes, Residual Provident Fund Scheme, Compensation Fund, and exemption of specific persons; and
- liaising with other government departments and branches, professional bodies and other interested organisations on matters pertaining to retirement schemes.
Enclosure 6 to FCR(95-96)123
Rank : Assistant Commissioner of Insurance (D2)
Post Titile : Assistant Director (Regulatory Standards)
Major Duties and Responsibilities :
To be responsible to the Director, MPFO for -
- giving advice and assistance in developing the MPF System;
- preparing proposal papers and reports relating to trustees and interface with the Occupational Retirement Schemes Ordinance, for consultation with industry and other organisations, and submissions to Executive Council and Legislative Council;
- formulation of draft drafting instructions on criteria for approval of trustees, standards and guidelines for trustees, trustees covenants, investment guidelines as well as standards for investment managers and custodians; and criteria for exemption of ORSO schemes; and
- liaising closely with the industry, professional bodies, interested groups and relevant government offices on the technical aspects of retirement schemes and to devise the interface arrangement with the Occupational Retirement Schemes Ordinance.
Enclosure 7 to FCR(95-96)123
Rank : Principal Executive Officer (D1)
Post Title : Principal Executive Officer (Administration and Planning)
Major Duties and Responsibilities :
To be responsible to the Director, MPFO for -
- co-ordinating efforts in developing ideas on the institutional arrangement for monitoring the administration and management of MPF Schemes;
- conducting progress review in mid-1996;
- planning for the setting up of the MPFA including assessing and acquiring the necessary resources and developing preliminary ideas on the structure of the future organisation;
- co-ordinating the development of technical specifications of the management information system for monitoring of future MPF Schemes;
- supporting and collating input for the MPF Advisory Board; and
- handling public relation matters.
Enclosure 8 to FCR(95-96)123
|
No. of posts
|
Rank and salary range
|
Notional annual mid-point salary (NAMS)
|
|---|
|
|
(at 1994-95 salary level)
$
|
(at 1995-96 salary level)
$
|
|
1
|
Senior Crown Counsel
(MPS 45-49) ($62,665 - $72,195)
|
733,980
|
807,240
|
|
2
|
Senior Insurance Officer
(MPS 45 - 49) ($62,665 - $72,195)
|
733,980
|
807,240
|
|
1
|
Senior Executive Officer
(MPS 34 - 44) ($39,300 - $60,475)
|
538,080
|
591,780
|
|
3
|
Administrative Officer
(MPS 27 - 44) ($29,005 - $60,475)
|
491,640
|
540,720
|
|
4
|
Insurance Officer
(MPS 29 - 44) ($31,805 - $60,475)
|
514,320
|
565,620
|
|
1
|
Chinese Language Officer I
(MPS 28 - 33) ($30,365 - $38,210)
|
379,740
|
418,260
|
|
1
|
Senior Personal Secretary
(MPS 22 - 27) ($23,080 - $29,005)
|
288,300
|
317,520
|
|
2
|
Personal Secretary I
(MPS 16 - 21) ($17,270 - $22,035)
|
217,800
|
239,880
|
|
2
|
Personal Secretary II
(MPS 4 - 15) ($8,555 - $16,450)
|
135,780
|
149,520
|
|
1
|
Clerical Officer II
(MPS 3 - 15) ($8,035 - $16,450)
|
135,780
|
149,520
|
|
1
|
Typist
(MPS 2 - 10) ($7,540 - $12,460)
|
105,780
|
116,520
|
|
2
|
Office Assistant
(MPS 1 - 6) ($7,085 - $9,710)
|
93,180
|
102,660 |
Note : The NAMS value for 1995-96 is based on the salary level of 1994-95. When Finance Committee considered FCR(95-96)81 on 24 November 1995, the NAMS value given in the submission to Members then was based on the salary level of 1995-96.
Last Updated on 2 December 1998
