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8.
Nonetheless Mr-Wiggham was explaining three
possibilities:
9.
(a) a rolling fund : ie setting money aside to meet- the actual bill for pensions for the next five years
ahead.
(b)
(c)
a provident fund.
Increasing the amount of pensions that could be taken up (this has already gone up from 25% to 50% and could go up further.
But all this was now affected by the Chinese dimension- ie their post-PADS concern about the state of the reserves.- Lu Ping had already drawn the Connection. Mr Shipley had briefed the Chinese on the new pension structure and how its ̈was working. Mr-Wiggham was trying to sort out various
lesser issues. But one clear conclusion was that it would not be possible for the Hong Kong Government to capitalise HMOCS pensions for payment by HMG along-lines discussed with HM Treasury in the autumn. Mr-Shipley would be writing formally to say so:
Conclusion
10. We have discussed our future tactics: We agreed that before tackling the Treasury it might make sense to air these issues with FCO Ministers (ie. Lord Caithness and
Mrs Chalker). I think that our aim should be to get ministeriäl support for pushing ahead - first with the Treasury and then with the Chinese on the general- compensation scheme. (the HKG are aware that it may not prover possible for a decision to be taken before the current end of March dead-line for contract police to decide whether to opt for: pensionable terms). At the same time we must air-the second issue of sterling safeguards, advising that this. should be kept separate while pointing out the political dimensions of the problem. As I see it we shall incur less opprobrium and fewer financial costs if we press ahead nows with the GCS as an expression of our confidence in the 1997- throughtrain, whereas we can argue that a decision on- sterling safeguards: need not be taken until nearer:1997′′ (though I have to say that the moral obligation to do something for existing pensionsers is very strong).
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RFA Burns....
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