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take unilateral action, the Chinese could frustrate it by announcing that this was a major change in the arrangements existing in 1984, and that the SAR Government after 1997
would be free to over-turn it and/or to reconsider related
provisions of the Joint Declaration.
13. On the other hand the Chinese themselves suggested
setting aside HK$15 billion to meet Civil Service pension liabilities and they might be persuaded to accept an option based on their own suggestion.
Commercial Loan (c)
14.
HKG have commissioned a consultancy report on
to enable all Civil Servants to take out loans against a
part of their pension entitlements. The attractiveness of such a scheme to HMOCS members would depend upon whether it could be extended to cover their full pension entitlements and how much HMG were prepared to subsidise the costs. From HMG's viewpoint this scheme would enable us to discharge at a quantifiable price before 1997 our obligation
to safeguard the sterling value of HMOCS pensions, rather than have to face an uncertain but possibly much greater liability thereafter (this assumes that financial institutions will be willing to operate it without HMG giving a sovereign guarantee ie a continuing contingent
liability). No assessment has yet been made of the level of financial support which might be necessary from HMG to make a scheme viable. A potential attraction is that such a scheme could be applicable to all Hong Kong Civil Servants, even if HMG topped up the loans to HMOCS officers.
could, however, prove divisive if a scheme for local
officers was ruled out by HKG. We would not expect insuperable difficulties with the Chinese. consider further whether this option could be turned into a viable scheme, and if so at what cost. HKG would need to
consider whether a variant tailored to HMOCS would cause resentment among local Civil Servants, and if so, what they
NC3AAV/6
It
Experts need to
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