30 March 1992
CONFIDENTIAL
HKA 233|1
Foreign & Commonwealth
Office
BY FAX
M Waters Esq
Principal Assistant Secretary
Civil Service Branch
Government Secretariat
Lower Albert Road
HONG KONG
Dear Mike
London SW1A 2AH
Telephone: 071-
CIVIL SERVICE PENSIONS: A POSSIBLE COMMERCIAL FUNDING SCHEME
File
183
160
184
1. Thank you for faxing us a copy of Richard Margolis' report on this. We have found the report suitably impenetrable.
-
We
2.
We are still studying the report but should be grateful for your early clarification on one aspect chart one. We have great difficulty in working out how Mr Margolis has calculated the second last column of the chart - Value of Investment on Retirement. The figures seem unduly high. cannot see how they relate to the third column (Amount Commited) and the fact that the discount factor and hypothetical rate of interest tend to indicate that the return should be negative. I attach a chart showing our own
calculations.
3.
It would clearly be helpful to know quickly whether this is an error on our part on on Mr Margolis'.
4.
On a more general note, we note from para 6(b) of your telno 925 that you think it unlikely that the commercial loan option will run. This is of course a matter for HKG. But we shall need to have convincing arguments from you in order to persuade the Treasury that you have not simply been going through the motions.
Yas aye
للنار
M V Stone
Hong Kong Department
MVSAEV
CONFIDENTIAL