A
Background and argument
3.
The Secretary of State and Mr Portillo agreed, at their meeting on 2 July also attended by Mr Patten, that officials This is now should produce an agreed set of costed options. complete. The options paper covers the full range of options which have been examined and which both we or the Treasury think should be considered. It also includes a list of advantages and disadvantages in respect of each pension safeguard option. Because Ministers recognised that it would not be possible for officials to reach agreement, the options paper does not make any recommendations on which options should be pursued. We have therefore prepared a commentary on the options which sets out FCO and ODA official thinking.
4.
The detailed examination of the various options over the summer has not changed our view of what needs to be done: (a) A sterling safeguard for pensions at a trigger rate of not less than HK $16: £1 but see paragraphs 5-7 below;
(b) A compensation scheme on traditional lines for all officers serving on 30 June 1997, with payments phased over
5 or 6 years; and
(c) Amendments to the regulators governing Supplementary Pension for Overseas Service (SPOS) to make them more
equitable.
The Governor has made plain in his letter to the Secretary of State of 13 October that he regards HMG meeting our obligations as a matter of honour.
The Trigger Level
5. The Secretary of State will wish to be aware of one area of sterling safeguards where more comprehensive data is now available. We have long known that if the Treasury agree to a sterling safeguard on traditional lines, they are likely to
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