EC(97-98)85
For discussion
on 25 March 1998
ITEM FOR ESTABLISHMENT SUBCOMMITTEE OF
FINANCE COMMITTEE
HEAD 148 - GOVERNMENT SECRETARIAT:FINANCIAL SERVICES BUREAU
Subhead 001 Salaries
Members are invited to recommend to Finance Committee the retention of the following supernumerary directorate posts in the Financial Services Bureau for a period of 12 months from 1 April 1998 to 31 March 1999 -
1 Administrative Officer Staff Grade B1
(D4) ($145,150 - $149,600)
1 Administrative Officer Staff Grade C
(D2) ($110,000 - $116,800)
1 Assistant Commissioner of Insurance
(D2) ($110,000 - $116,800)
1 Principal Executive Officer
(D1) ($92,650 - $98,300)
PROBLEM
We need to retain the Mandatory Provident Fund Office (MPFO) to prepare for the launching of the Mandatory Provident Fund (MPF) System.
PROPOSAL
2. The Secretary for Financial Services (SFS) proposes to retain the following directorate posts for 12 months from 1 April 1998 to 31 March 1999 -
- one Administrative Officer Staff Grade B1 (AOSGB1) (D4);
- one Administrative Officer Staff Grade C (AOSGC) (D2);
- one Assistant Commissioner of Insurance (ACI) (D2); and
- one Principal Executive Officer (PEO) (D1).
JUSTIFICATION
3. At its meeting held on 21 February 1997, Finance Committee (FC) approved the extension of the MPFO for 13 months from 1 March 1997 to
31 March 1998 in order to continue work on the development of the MPF System. The existing organisation charts of the Financial Services Bureau (FSB) and MPFO are at Enclosures 1 and 2 respectively.
Progress of the MPFO's work
4. The MPFO has made good progress in the preparatory work for the development of the MPF System and drafting of legislation necessary for the implementation of the MPF Schemes Ordinance. We have resolved numerous policy and technical issues after consulting the MPF Advisory Board and Panel of Specialists. Between November 1996 and June 1997, we also held more than
20 meetings with the Subcommittee on MPF System of the previous Legislative Council to examine details of the proposed MPF System, including the basic approach to the system and specific issues such as approval of MPF trustees, duties and sanctions of approved trustees, investment restrictions and guidelines, scheme membership, scheme operational issues, interface arrangements for existing voluntary schemes, industry schemes, and measures to ensure the security of scheme assets, protect the low-income group and minimise administrative costs. As part of the consultation process, we have also held numerous meetings with employers' groups, related trade unions and service providers.
5. Taking into account the feedback obtained in the consultation, and having worked very closely with the law drafting team of the Department of Justice, we were able to complete a comprehensive set of draft legislation, comprising an amendment bill and two sets of draft regulations governing the operation of the MPF System and exemption of existing voluntary schemes. Following approval by the Executive Council, we introduced the amendment bill into the Provisional Legislative Council (PLC) on 26 November 1997. We also submitted the draft regulations to the PLC for examination together with the amendment bill. The PLC has established a Bills Committee which held more than 30 meetings to scrutinise the draft legislation. The PLC passed the amendment bill on 25 February 1998. Our plan is to complete the enactment process within the current legislative session.
6. Apart from the legislative tasks, we have also started the preparatory work for the implementation of the MPF System. Such work includes compilation of guidance notes for service providers; drawing up the structure of the MPF Schemes Authority (MPFA); working out the arrangements for the transfer of the functions of the Office of the Registrar of Occupational Retirement Schemes to the MPFA; preparing internal operational manuals of the MPFA; drawing up the requirements of a computerised management information system of the MPFA; mapping out the promotion and publicity strategies for launching the MPF System; producing guidelines for employers and employees, etc.
MPFO's tasks in the coming year
7. On the assumption that the enactment process goes smoothly and the process can be completed in April 1998, the MPFO will need to work on the preparation for the launching of the MPF System. The work focus will shift from the legislation front to matters pertaining to planning, operational, publicity and other implementational issues. Primarily, the MPFO will need to deal with such tasks as finalising the organisation and structure of the MPFA; producing administrative guidelines for employers and employees, trustees and other service providers; finalising the transfer of functions of the Office of the Registrar of Occupational Retirement Schemes to the MPFA; design, development and installation of the computerised management information system of the MPFA; launching of intensive publicity and education programmes to promote the MPF System; and launching of recruitment campaign and developing the necessary staff training programmes for the MPFA.
Resource requirements
8.Having regard to the shift in the focus of work of the MPFO, we see the need to revise the duty lists of the four directorate posts and to introduce some restructuring at the non-directorate level by deleting the post of Legal Adviser and a post at the Manager level but beefing up the executive and clerical support in the Administration and Planning Division, with the creation of additional posts of one Senior Executive Officer and one Clerical Officer. The proposed job descriptions of the four directorate posts are at Enclosure 3. Upon completion of the proposed restructuring, the total establishment of the MPFO will remain at the existing level of 25. The proposed organisation chart of the MPFO is at Enclosure 4. A list of the non-directorate posts is at Enclosure 5.
Phasing out of MPFO
9.Our plan is to seek the lump sum capital grant for setting up the MPFA when the enactment process of the draft MPF legislation is completed. We shall then recruit suitable staff to join the MPFA to take over the duties of the MPFO. When this happens, we shall phase out and transfer existing staff in the MPFO back to their respective grades/departments. The MPFO posts will lapse upon the transfer of the incumbents of the related posts back to their respective grades/departments. We envisage that, barring unforeseen circumstances, this phasing out programme will be completed within the coming 12 months.
FINANCIAL IMPLICATIONS
10. The notional annual salary cost of the four supernumerary directorate posts at MID-POINT is $5,661,000 as follows -
|
Supernumerary post
|
$
|
No. of Posts |
|
AOSGB1
|
1,795,200
|
1 |
|
AOSGC
|
1,360,800
|
1 |
|
ACI
|
1,360,800
|
1 |
|
PEO
|
1,144,200
|
1 |
|
Total
|
5,661,000
|
4 |
The total full annual average staff cost of these four posts, including salaries and staff on-cost, is $10,051,152.
11. Should Members approve the proposed retention of the four supernumerary directorate posts, we shall create two non-directorate posts through the departmental establishment machinery and retain 19 out of 21 of existing non-directorate posts in the MPFO to provide necessary support to the directorate officers. The total establishment of the MPFO will remain at 25. The total notional annual mid-point salary of the 21 non-directorate posts is $9,601,320 and the total full annual average staff cost is $13,960,800.
12. We have included sufficient provision in the 1998-99 draft Estimates to meet the cost of the proposal.
BACKGROUND INFORMATION
13. Following the enactment of the MPF Schemes Ordinance in August 1995, SFS set up a working group on MPF within FSB to prepare for the development of the subsidiary legislation under the MPF Schemes Ordinance. At the FC meeting held on 24 November 1995, Members approved a commitment of $22 million for engaging consultants to provide the necessary professional support for the preparation of the required subsidiary legislation. On 9 February 1996, FC approved the creation of 25 supernumerary civil service posts to staff the MPFO which is responsible for making preparation for the implementation of the MPF System. On 21 February 1997, FC approved the extension of the MPFO for 13 months from 1 March 1997 to 31 March 1998 to continue work on the development of the MPF System.
14. Since its inception, the MPFO has made very good progress in its work. We introduced a draft amendment bill proposing changes to the MPF Schemes Ordinance and 11 other Ordinances to PLC on 26 November 1997, together with the submission of two sets of regulations. At the same time, the MPFO has started briefing the Bills Committee of the PLC on the amendment bill and the regulations. The PLC passed the amendment bill on 25 Febraury 1998. We aim to secure passage of the subsidiary legislation within the current legislative session.
CIVIL SERVICE BUREAU COMMENTS
15. Civil Service Bureau agrees that the four supernumerary directorate posts for the MPFO should be extended for one more year to facilitate preparatory work for launching the MPF System. The grading and ranking of the proposed posts are appropriate.
ADVICE OF THE STANDING COMMITTEE ON DIRECTORATE SALARIES AND CONDITIONS OF SERVICE
16. Since the four directorate posts are proposed on a supernumerary basis, we shall report their retention, if approved, to the Standing Committee on Directorate Salaries and Conditions of Service in accordance with the agreed procedure.
Financial Services Bureau
March 1998
Enclosure 3(a) to EC(97-98)85
Proposed Job Description for Director, Mandatory Provident Fund Office (MPFO)
|
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;
- co-ordinating Government's efforts in the setting up of the MPF System;
- undertaking consultation with relevant industries, professional bodies, and relevant supervisory bodies (e.g. Securities and Futures Commission, Hong Kong Monetary Authority) for the implementation of the MPF System;
- setting up the structure and organization of the MPF Schemes Authority for monitoring the administration of MPF Schemes and prudential supervision of the service providers; and
- giving steer to the establishment of the MPF Schemes Authority and the necessary preparation work for the launching of the MPF System.
Enclosure 3(b) to EC(97-98)85
Proposed Job Description for Assistant Director (Scheme Operations)
|
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 implementing the MPF System;
- dealing with all matters relating to the MPF System on aspects of scheme operations such as withdrawal of accrued benefits, administration, management and maintenance of MPF Schemes, Industry Schemes, Compensation Fund, and exemption of specific persons;
- liaising with other government departments and bureaux, industries, professional bodies and interested organizations on matters pertaining to the operation of MPF Schemes;
- developing the internal operational system and working manuals for subjects concerning scheme operations for the future MPF Schemes Authority; and
- launching of education and publicity programmes to promote the MPF System.
Enclosure 3(c) to EC(97-98)85
Proposed Job Description for Assistant Director (Regulatory Standards)
|
Rank
|
:
|
Assistant Commissioner of Insurance (D2) |
|
Post Title
|
:
|
Assistant Director (Regulatory Standards) |
Major Duties and Responsibilities :
To be responsible to the Director, MPFO for -
- giving advice and assistance in implementing the MPF System;
- dealing with matters relating to criteria for approval of trustees, standards and guidelines for trustees, trustee's covenants, investment standards and guidelines as well as interface of existing schemes registered under the Occupational Retirement Schemes Ordinance with MPF Schemes;
- liaising closely with the industry, professional bodies, interested groups, Securities and Futures Commission and relevant government departments on the technical aspects of the MPF System;
- preparing guidance notes for trustees and other service providers; and
- developing the internal operational system and working manuals for subjects relating to regulatory standards for the future MPF Schemes Authority.
Enclosure 3(d) to EC(97-98)85
Proposed Job Description for Principal Executive Officer (Administration and Planning)
|
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 -
- preparing for the setting up of the MPF Schemes Authority;
- co-ordinating efforts in development of internal operational system and working manuals for the MPFA;
- co-ordinating the project for the design, development and installation of computerized information management system for the MPFA;
- developing human resource programmes for recruitment and training of staff of the future MPF Schemes Authority, and subsequent implementation of the programme;
- supporting and collating input for the MPF Advisory Board; and
- handling public relations matters.
Enclosure 5 to EC(97-98)85
List of Non-Directorate Posts
|
No. of posts
|
Rank and Salary Range
|
Notional annual mid-point salary (NAMS)
|
|
|
|
(at 1997-98 salary level)
$ |
|
2
|
Senior Insurance Officer
(MPS 45 - 49) ($72,135 - $83,105)
|
|
929,220 |
|
2
|
Senior Executive Officer
(MPS 34 - 44) ($45,240 - $69,615)
|
|
681,180 |
|
3
|
Administrative Officer
(MPS 27 - 44) ($33,355 - $69,615)
|
|
622,440 |
|
3
|
Insurance Officer
(MPS 29 - 44) ($36,575 - $69,615)
|
|
651,060 |
|
1
|
Chinese Language Officer I
(MPS 28 - 33) ($34,920 - $43,940)
|
|
481,020 |
|
1
|
Senior Personal Secretary
(MPS 22 - 27) ($26,540 - $33,355)
|
|
365,160 |
|
2
|
Personal Secretary I
(MPS 16 - 21) ($19,860 - $25,340)
|
|
275,880 |
|
2
|
Personal Secretary II
(MPS 4 - 15) ($9,845 - $18,915)
|
|
171,960 |
|
1
|
Clerical Officer
(MPS 16 - 21) ($19,860 - $25,340)
|
|
275,880 |
|
1
|
Assistant Clerical Officer
(MPS 3 - 15) ($9,245 - $18,915)
|
|
171,960 |
|
1
|
Typist
(MPS 2 - 10) ($8,675 - $14,330)
|
|
134,040 |
|
2
|
Office Assistant
(MPS 1 - 6) ($8,150 - $11,170)
|
|
118,140 |
|
21
|
|
|
9,601,320 |
