CONFIDENTIAL
A
EXTRACT
FROM SING HOWE'S MINUTE OF
7 MARCH 19
IF SO
SHOULD HMG GO BEYOND THE CARR-ROBERTSON ASSURANCE AND SEEK TO TAKE OVER THE PENSION ENTITLEMENTS OF HONG KONG HMOCS OFFICERS?
ON WHAT TERMS?
14. If Ministers accept that HMG would have to take responsibility for the pensions of HMOCS in Hong Kong in the
at
or
on
of a default the
question arises whether we should initiate a formal take-over of the
pensions
before 1997.
be This would
lines which have
become standard elsewhere, but with the important difference
Hong Kong, which i s not aid-worthy, would me et the cost. question arises irrespective of whether
to
that
(The
or
not
i t
proves necessary
main argument for
The reaffirm the Carr-Robertson Assurance).
is financial
money at
taking
responsibility over
The
the
inconsiderable.
to
extinguish
is stake
not
be would
contingent liability. Excluding widows! benefits, for which no estimate
pensions on
is currently
approximately
£10
available, expenditure million pa (at 1984-85 prices and exchange rates) at the turn of the
century. The trend would be downwards, but the liability would not be finally extinguished until 2040. HMG would have to finance this itself if the SAR Government defaulted. The risk would be avoided
by
for responsibility to pass to arranging
HMG before Chinese
sovereignty is resumed: the Hong Kong Government would finance the pensions by handing over capitalised values
of the entitlements (if
necessary in a phased
As at programme).
1997, these would be in the
region of £210 million at 1984-85 prices and exchange rates.
15. The Hong Kong Government is strongly opposed to a take-over because of the divisive effect this would have on the public
It would also be difficult to persuade the Legislative
Council to approve the £210m representing the capitalised value of
Moreover, the pensions.
action on HMOCS pensions by
by HMG would
service.
inevitably undermine
our reas sur ances
on
indeed there
i s a case for
the
of credibility
leaving responsiblity
the
Agreement;
The
for
these pensions with the SAR Government as a mark of our faith in the
Agreement.
balance of argument is therefore against early action, but the question should be looked at again, perhaps in about
1990.
CONFIDENTIAL