CONFIDENTIAL
ANNEX A
COMPENSATION SCHEME: DETAILS OF PROPOSAL AND HANDLING
1.
After considering a number of possible options for a scheme, we have concluded that the most appropriate one, given the special circumstances of Hong Kong remains the sort of compensation/incentive scheme which Ministers considered in 1988, with some slight modifications.
elements of the scheme would thus be:
The key
(a) In order to give HMOCS members an incentive to stay beyond 1997, and to help them get over the psychological barrier of 1997, we propose that 20% of the maximum compensation sum (which would be calculated on the same basis as for previous schemes) should be payable in 1997, after the transfer of sovereignty, and additional sums of 10% of this total would accrue yearly thereafter to those
who remained. Thus the maximum compensation would be
available to those who stayed on for 8 years.
(b) In order to overcome possible Chinese sensitivities about serving SAR officials being in receipt of payment from HMG, we could arrange that all sums payable under the scheme
would be set aside and would be accessible to the officer
concerned only when he or she retired, resigned or otherwise
left the service of the SARG. The funds might, for example,
be placed in an interest-bearing account which would revert
to the officer at the appropriate time.
COSTS
2.
It is extremely difficult to calculate accurately how
much the scheme proposed would cost. This would depend on:
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CONFIDENTIAL
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