30 September 1992
Mr Woodfield
HM Treasury
Parliament Street
LONDON
W1
-C
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270 2650
HONG KONG HMOCS: OPTIONS FOR PENSIONS SAFEGUARD
1.
It is helpful
Thank you for your letter of 28 September. to have your early views so that we can clear up quickly exactly what the options paper should cover.
2. On the graphs, I agree that it would be
for more on
useful to have graphs covering options A, B and C - option B see below. I should be most grateful if, by copy of this letter, Mr Hughes in GAD could initiate this, together with the cost estimates for HMG to safeguard the non-commutable part of pension only
your letter.
Option B and Early Retirement
3.
para 3 of
Our motives in suggesting that neither option B nor the early retirement option should be explored in any detail in the paper was so as to make it digestible for Ministers.
As
it is, the number of options and graphs presented will present a complex picture, without having options which are either marginal or not within our power/control.
On option B, I should be grateful if you would reconsider your view that it should remain in the paper. A key point in
4.
announcing an exchange rate now is to eliminate the uncertainty that HMOCS officers face. If we were to set the exchange rate as at 1 July 1997, no-one would know what this J would be. As Mr Cox set out in his letter to you of 11 September, setting the safeguard at (a percentage of) the rate on the day the officer retired, is completely arbitrary, would favour those who had already retired -not the group we are primarily interested in- and would not resolve the uncertainty of those who have not yet retired. As the last two weeks have shown, such a system could be highly divisive-
opt.saf.ADM
SLM
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