CONFIDENTIAL
COMPENSATION SCHEME: DETAILS OF PROPOSAL AND HANDLING
ANNEX A
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. The key elements of the scheme
would thus be:
COSTS
a)
b)
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
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.
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.
2.
It is extremely difficult to calculate accurately how much the scheme proposed would cost. This would depend on:
1