For discussion FCR(96-97)29 on 28 June 1996

ITEM FOR FINANCE COMMITTEE

LOAN FUND
HEAD 251 - HOUSING
New Subhead "Housing loans to Hong Kong Institute of Education staff"

Members are invited to approve the creation of a new subhead with a commitment of $30 million under Head 251 Housing for housing loans to eligible ex-Education Department lecturing staff who have transferred to the Hong Kong Institute of Education.



PROBLEM

The Hong Kong Institute of Education (HKIEd) needs funds to provide housing downpayment loans to eligible ex-Education Department (ED) lecturing staff who have transferred to the Institute.

PROPOSAL

2. The Secretary for Education and Manpower proposes to create a new subhead under Head 251 with a commitment of $30 million for housing downpayment loans to eligible ex-ED lecturing staff, to be drawn down as and when required.

JUSTIFICATION

3. Under the bridging-over arrangements for civil servants on transfer to the HKIEd, lecturing staff on Master Pay Scale (MPS) points 22 to 33 may, on transfer to the HKIEd, retain their eligibility for the Home Purchase Scheme (HPS), including the downpayment loan. Fifty-five lecturing staff on MPS 22 to 33 in the HKIEd, who have transferred from ED, are eligible for the HPS. Five of them have submitted initial applications under the scheme.

FINANCIAL IMPLICATIONS

4. Based on a 24-month salary downpayment loan, which is the highest standard rate, for all the 55 lecturing staff, the total amount of loan required would be about $45 million at their current salary level. The details are -

Number of
officers

Existing total monthly salary

Maximum downpayment loan

Total downpayment loan

55

$1,873,855

24 months' salary

$44,972,520
Say $45 million

However, we do not envisage all eligible staff applying for the maximum downpayment loan at the same time. We therefore propose a commitment of $30 million, that is two-thirds of the sum above, which we estimate would be sufficient to provide housing downpayment loans to these officers. The loans shall be repayable by monthly instalments of principal and interest over a maximum period of ten years in the same way as that applicable for civil servants.

5. The HKIEd will meet the HPS allowance payable to eligible transferred lecturing staff on MPS 22 to 33 from its recurrent subvention.

BACKGROUND INFORMATION

6. In September 1994, the HKIEd took over the management of the four Colleges of Education and the Institute of Language in Education from the ED. ED initially seconded the concerned staff en bloc for a year to the HKIEd. The Executive Council endorsed on 17 January 1995 a revised bridging-over package for transfer of lecturing staff to the HKIEd that includes the offer of abolition-of-office terms, a signing-up bonus and retention of eligibility for HPS.
The Finance Committee approved on 27 January 1995 vide FCR(94-95)109, new commitments for payment to those lecturing staff who retired on abolition-of-office terms and payment of a signing-up bonus to those lecturing staff who would transfer to the HKIEd.

Education and Manpower Branch

June 1996


Last Updated on 2 December 1998