2
In addition to the above there is one further matter we propose should be incorporated within the new Governors' Pension Scheme and what is to bring the pensionability of Governors' emoluments into line with the agreed policy reached in respect of HMOCS officers serving in dependent territories. This was discussed informally with Gealy and I understand there is unlikely to be any objection in principle on your part.
4. The basic criterion of this system is that pensionable emoluments are strictly related to UK levels and comprise a notional equivalent UK salary plus an inducement element. As you will know in the case of HMOCS officers this system came into being with effect from 1 January 1974 following the exchange of letters between Eric Burr and Ken McNeill dated 23 September 1974 and 22 October 1974 respectively which finally settled the guidelines we would adhere to.
5. In seeking to include Governors within this concept I think it is fair to claim we would break no new ground and of course in practice the pensionable emoluments of Governors already reflect a bias towards the principle of UK relativity as a consequence of the policy whereby HMG tops up basic salaries payable by overseas territories by means of an addition to salary in those cases where the basic is considered to be at too low a level in comparative UK terms. On the administrative side no real problems are foreseen in assessing UK equivalent salaries. As part of their current duties FCO Inspectors carry out periodic examinations of all Governors' posts and could relate them broadly in accordance with equivalent posts in the Diplomatic Service; there is therefore a ready-made framework on which to work, and normally a DS officer would be appointed to a Governorship at an equivalent level to his substantive grade.
6. To summarise, as from 1 January 1974 we propose that the pensionable emoluments of all Governors pensionable under the Governors' Pensions Scheme should comprise a notional United Kingdom related salary (including Inner London Weighting) plus an inducement element at the standard rate used in assessing salary supplements of designated HMOCS officers serving in dependent territories.
7. In terms of magnitude the number of Governors involved will be small.
Only four of the sixteen Governors, Commissioners or Administrators currently serving in Dependencies are pensionable under the Governors Scheme, the others being either officers on secondment or appointed on contract terms. Of the five posts which would be immediately concerned if retrospection is agreed it is estimated that in three cases the basic salaries (including addition to salary where payable) are below the level of pensionable emoluments assessed on a strictly UK related basis. In general therefore the outcome would be to balance an embarrassing situation in which in some cases the pensionable emoluments of Governors can be seen to compare unfavourably with those of HOCS officers following their switch to UKRPE whilst in others the pensionable emoluments are excessive in UK comparative terms.
8. To ensure that no Governor serving or retired since 1.1.74 would have to suffer a drop in pensionable emoluments I propose we should follow the normal practice in such circumstances of including a general proviso that where a Governor's pensionable emoluments prior to the coming into effect of the Scheme exceed the UKRPE for that post then the serving or retired Governor may retain his personal right to the higher amount if that is to his advantage; but as mentioned above this is only likely to be necessary in one case.
9. I should perhaps mention that there is one area which caused us some initial concern and that is the adverse effect such a change could have with regard to the pensionable emoluments a Governor of Hong Kong would normally expect to receive because of the high rate of basic salaries paid there, in comparison to salary levels in the UK. As you may know there is no OSAS agreement with Hong Kong and HEOCS officers serving there are outside the UKRPE arrangements.
This means that any Governor of Hong Kong made subject to the terms of the Governors' Pension Scheme and whose pensionable emoluments were assessed on a UK related system would come out badly in terms of pension earning capacity in comparison to those senior
/officers...