Mr
Paxl
HLB 431 16
..OV1990
CALL BY THE CS ON LORD CAITHNESS: 20 NOVEMBER: HMOCS
1. Paragraph 9 of Peter Tibber's Note states that Sir David
explained the latest Treasury proposal for resolving HMOCS pensions. Sir David has probably given Lord Caithness his
interpretation of the Treasury proposal which is likely to
be at variance with theirs. I am concerned that he may have thus lead Lord Caithness to believe the two sides are quite
close.
KNOW
actuarity
2. As your minute to PS/Lord Caithness of 19 November sets
out, we do not coneur exactly what the Treasury view is. But it is highly likely to be that HKG should make over, before 1997, the full capitalised value of all existing HMOCS pensions, together with an
assessed figure for
all possible future HMOCS pensions liabilities. HKG, on the other hand, are considering the possibility of making over now a capitalised sum for all current HMOCS pensioners and then making over capitalised sums on an annual basis to take account of HMOCS members who retire in that year [in return for a sterling safeguard]. This would leave(the Treasury) in doubt what happens after 1997 and would leave
the Treasury open to considerable currency fluctuations.
3. I should be grateful for advice as to whether we should
take any action on this. We do not want Hong Kong doing a lot of work on a proposal which we can be almost certain the Treasury will reject.
23 November 1990
Miss Marsden
BATAIL/1
M V Stone
Mr Stysie
stonga
I an
Thank
you.
sending a ter to HK.
W 23/1.
95