Pension adjustment mechanism
Increase in pensions is governed by the Pensions (Increase) Ordinance and Widows and Orphans Pension (Increase) Ordinance. In accordance with the pension increase legislation, pensions paid to pensioners under pension schemes for civil servants and judicial officers and their dependants shall be subject to an annual increase according to the annual increase in the Consumer Price Index (A) (CPI(A)). The increase shall be calculated by reference to the increase on the annual average monthly CPI(A) of the last financial year over that of the immediately preceding financial year.
Based on this mechanism, pensions in payment on or before 1 April 2017 are increased by 2.1% with effect from 1 April 2017. Such arrangement does not apply to the pensions paid to pensioners who have not yet reached the normal retirement age.