CONFIDENTIAL
RECORD OF A MEETING ON COMPENSATION/INCENTIVE SCHEME AND
PENSIONS ARRANGEMENTS FOR MEMBERS OF HER MAJESTY'S OVERSEAS
CIVIL SERVICE IN HONG KONG: 20 DECEMBER 1991 AT 1215
Present
FCO Diplomatic Wing
ODA
Treasury
Mr Burns
Mr Kerby
Mr Ricketts
Mr Stone
Mr Wightman
Miss Williams
Mr Fish
Ms Brown
Mr Rayson
Mr Woodfield
Mr Brancen
Capitalisation
1. Ms Brown said that the team had been grateful for the opportunity to make a successful visit to Hong Kong, during which they had discussed the Treasury's capitalisation proposal. Members of HKG had been cooperative and had
accepted that they would not have any difficulty with the proposal at a technical level. HKG had seemed pleasantly surprised at the low cost of some of the options.
2.
Ms Brown handed over a copy of the team's
"without Commitment" note on the capitalisation
option. This showed that converted to £ sterling, the global cost of the pensions liability would be between £170 m and £370 m spread over 5 years. The exact cost would depend on several factors, primarily: whether all pensionable service was involved, or only that up to 1 January 1992 and whether transfer payments from HKG to HMG
took place in 1992 or 1997.
3. Ms Brown continued that the team had discussed
affordability. They were confident that HKG could afford to capitalise HMOCS pensions given: healthy current reserves;
WADABJ/1
CONFIDENTIAL