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officers to count for compensation purposes would not be great (Mr Stone estimates about £3 million). The Treasury are not even aware that this is an issue. Service bought back has counted towards compensation in previous cases. My conclusion is that this is a fight we do not need to pick. But if we were to do so, a public statement would be needed, and the best timing would be to make such a statement at the same time as the statement on extending eligibility for HMOCS among the Judiciary. I therefore wanted you to be aware of the issue at the same time as considering the proposed statement on judicial officers.
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3. The background is that HKG allows the common practice that, where officers change from agreement terms to pensionable terms, they can "buy-back" pensionable service - usually by repaying the gratuities already received. ODA recognise such bought back service for SPOS purposes, and we believe it would have to be recognised for the purposes of sterling safeguards. We now need to consider whether such bought back service should count towards any compensation payments HMG will grant under the scheme being considered by Ministers. The compensation payable increases for the number of years served, until 10 years of service is reached. Although the compensation/inducement scheme we discussed with the HK HMOCS Association in May refers unreservedly to "pensionable service", we have made no comment on the question of whether bought back service is included in that expression. But HKG advise that officers have an expectation that bought back service will count towards compensation.
4.
The arguments for considering that service bought back by contract officers who apply for membership of HMOCS after the date on which the Joint Declaration was ratified should not count for compensation are as follows:
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