NV
SECRET
FM HONG KONG
TO IMMEDIATE FCO
TELNO 2673
HKA 233/1
OF 101101Z NOVEMBER 92
SECRET
TOP COPY Q DIST?
604
036027
MDHIAN 7062
pa
PERSONAL FOR RICKETTS, HKD FORM GOVERNOR
592 + 60
602
YOUR TELNO 1592 HMOCS
W603
1.
CSB HAVE TODAY FAXED TO WHITNEY (HKD) A COPY OF A FURTHER LETTER FROM THE DEPUTY CHAIRMAN OF THE HONG KONG BANK, WHICH MAKES IT VERY CLEAR THAT THE BANK DO NOT BELIEVE IT IS POSSIBLE TO PROVIDE AN EFFECTIVE PRIVATE SECTOR PENSION SAFEGUARD OPTION WITHOUT THE BENEFIT OF AN ACCEPTABLE EXTERNAL GUARANTEE.
2. WE ARE INDEED RECONSIDERING THE ISSUE OF A GENERAL RIGHT TO RETIREMENT FOR HMOCS OFFICERS IN 1997 (PARA 3 OF TUR). THE GOVERNOR WILL BRING A PAPER ON THIS SUBJECT WITH HIM TO LONDON NEXT WEEK. WE REALISE THAT THIS WOULD BE ATTRACTIVE TO THE TREASURY AS IT WOULD REDUCE THE POTENTIAL COSTS TO HMG OF ANY STERLING SAFEGUARD (SMALLER PENSION AND NO NEED TO PROTECT COMMUTED LUMP SUM PENSION GRATUITIES EARNED BEFORE 1997 BUT PAYABLE SOME YEARS THEREAFTER). WE THINK IT WOULD BE SENSIBLE FOR THE SECRETARY OF STATE TO TELL MR. PORTILLO THAT WE ARE RECONSIDERING THIS ISSUE AND THAT THE GOVERNOR HOPES TO MAKE FIRM RECOMMENDATIONS NEXT WEEK.
3. WE ARE CURRENTLY CONSIDERING THE QUESTION OF LOCAL PENSION SAFEGUARDS IN THE OVERALL CONTEXT OF CIVIL SERVICE ISSUES OF CONCERN IN THE RUN UP TO 1997. IT IS ALSO POSSIBLE THAT THE NEW PENSION SCHEME OPTION DEADLINE WILL BE FURTHER EXTENDED (PARA 4 OF TUR). A DECISION IS EXPECTED IN LATE NOVEMBER. BUT WE WOULD PREFER IT IF THE SECRETARY OF STATE DID NOT MENTION THIS TO MR. PORTILLO. THERE IS A DANGER THAT THE TREASURY WOULD TRY TO USE THIS AS AN EXCUSE TO DELAY FINALISATION OF HMOCS ARRANGEMENTS.
PATTEN
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