CONFIDENTIAL
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064630 MDHIAN 1669 ·
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CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 2892
OF 28100OZ SEPTEMBER 90
FOR PAUL, HKD FROM WIGGHAM, SCS
STERLING SAFEGUARDS OF PENSIONS
H&B +31
ОСТ 194%.
1. DURING YOUR RECENT VISIT HERE, SHIPLEY DISCUSSED WITH YOU AND BURNS IDEAS FOR STERLING SAFEGUARDS FOR HMOCS PENSIONS. OUR PROPOSAL PAPER IS NOW BEING FAXED TO YOU SEPARATELY. (THE NOTE LEFT WITH YOU BY SIR D. FORD WAS FOR ILLUSTRATION PURPOSES ONLY).
2. IN DISCUSSION WITH SHIPLEY, YOU ASKED US TO CONSIDER THE RELATIVE PRIORITY OF THIS PROPOSAL VIS-A-VIS THE GENERAL COMPENSATION SCHEME (GCS). YOU WILL APPRECIATE THAT IN OUR VIEW BOTH PROPOSALS SHOULD BE PURSUED VIGOROUSLY. THE PRESSURE FROM SERVING STAFF AND PENSIONERS IS INTENSE. THEY HAVE BEEN ASKING
FOR A GCS FOR SEVEN YEARS WITHOUT RECEIVING A POSITIVE ANSWER. THEY ARE AWARE, AS WE ARE, THAT IN PAST DE-COLONISATION EXERCISES, HMOCS MEMBERS WERE PROVIDED WITH BOTH COMPENSATION ARRANGEMENTS AND STERLING SAFEGUARDS UNDER PUBLIC OFFICERS' AGREEMENTS.
3. THAT SAID, HOWEVER, WE APPRECIATE THAT YOUR RESOURCES ARE NOT INFINITE. IF A CHOICE HAS TO BE MADE, WE WOULD PROBABLY RECOMMEND IN THE PRESENT SITUATION THAT PRIORITY SHOULD BE GIVEN TO STERLING SAFEGUARDS. THIS IS BECAUSE THE GCS WOULD NOT NEED TO BE BROUGHT INTO BEING UNTIL MUCH CLOSER TO 1997, ALTHOUGH AN EARLIER ANNOUNCEMENT WOULD BE NECESSARY TO GIVE REASSURANCE TO STAFF. ON THE OTHER HAND, STERLING SAFEGUARDS WOULD AFFECT PENSIONS IN PAYMENT NOW, AND PENSIONS FOR OFFICERS WHO WOULD BE RETIRING IN THE NEAR FUTURE. THE FACT THAT THE STERLING VALUE OF FUTURE PENSION BENEFITS WOULD BE PROTECTED FROM CURRENCY FLUCTUATIONS SHOULD ALSO HELP TO REASSURE SERVING OFFICERS. FOR THESE REASONS, AND BECAUSE OF RECENT DRASTIC FLUCTUATIONS IN THE STERLING/DOLLAR EXCHANGE RATE, THE NEED FOR URGENT ACTION ON STERLING SAFEGUARDS IS THAT MUCH GREATER.
4. WE COULD NOT AGREE TO ANY FURTHER DELAY IN THE CONSIDERATION OF THE GCS UNLESS SATISFACTORY STERLING SAFEGUARDS OF PENSIONS
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