HKB 233/1
Mr Burns
CONFIDENTIAL
175
கிய
FROM: N J Cox
Hong Kong Department
DATE: 12 November 1991
HMOCS: STERLING SAFEGUARDS
cc: Mr Dew, RMD
Ms Williams, HKD
the Ricketts
1. I attach copies of the papers regarding the October 1990 Treasury proposal, mentioned at this morning's meeting, that the Hong Kong Government should pay HMG before 1997 the capitalised value of HMOCS pensions. It is clear that the Governor has considered this proposal and ruled it out for
three reasons:
a) local officers would also demand the capitalisation of
their pensions before 1997;
b) it would be a clear vote of no confidence in the future SAR's ability to pay; and
c) it would not run with the Chinese, who would see it as
reserve stripping.
Sir R McLaren accepted this advice in February.
2.
I have spoken to Mr Rew in Treasury to see whether he could explain more clearly how the Treasury proposal could
NJCAAD/1
CONFIDENTIAL