CONFIDENTIAL

a) approve the attached amendment to Section J (Retirement) of the Colonial Regulations which would apply to Hong Kong only.

A departmental Legal Adviser considers this to be necessary and

Hong Kong have agreed.

Background and Argument

3. After the signing of the Joint Declaration the Hong Kong Government recognised that arrangements would need to be made to retire certain civil servants early, due to the constitutional

change which will take place in 1997. A Limited Compensation

Scheme was established in December 1987 which allowed for

certain pensionable officers to retire:

- if circumstances exist which make it unreasonable for the

officer to continue his service

- in the interest of localisation

- to facilitate constitutional change

in the interest of the development of the public service.

4. A covert element of the scheme was put into operation at the same time for Special Branch officers. To date 16 officers have

been "overtly" retired and approximately 700 officers have been retired under the Special Branch element. All these officers

CONFIDENTIAL

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