address the concerns expressed by your members and other civil service staff associations. While full funding of

pensions has been ruled out for financial reasons, careful

consideration is being given to other possibilities,

including partial funding of pensions, higher commutation of

pensions and the establishment of a provident fund.

We

You also express concern about the Chinese attitude to

the nationality package. We shall continue to discuss this

issue with the Chinese Government. As we have made clear

many times, our only aim is to provide assurances to keep

people in Hong Kong who are of crucial importance to maintaining its stability and properity in the long run. hope that in time the Chinese Government will come to accept

that this is our sole objective. In the meantime, we and

the Hong Kong Government will continue to do all we can to

promote confidence in the Civil Service in recognition of

its vital role in maintaining Hong Kong's stability and

prosperity in the crucial years up to 1997.

Peter Tibber

Private Secretary to

Earl of Caithness

MATAAJ/2

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