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4. The HMOCS Association will argue strongly for a pension safeguard at HK$13.76: £1.
Although their final position is
likely to depend upon the acceptability of the overall package
including compensation and general right to retirement, they
will stress that the HK$13.76 rate can be justified as an
average in 1991, that there is no basis for penalising HMOCS officers who have served in Hong Kong by setting an
artificially adverse rate and that the level of salaries
should not be the issue. But Chris Patten and I conclude that
16:1 would be a reasonable compromise as part of the right
package. He does not believe that we could impose a more
adverse rate.
Compensation
5.
You reasonably asked about the objective we were seeking to achieve with our revised compensation proposal,
particularly given a right to retire for HMOCS officers on transfer of sovereignty. Our initial proposal was designed to
provide a measure of compensation and incentive to officers to
encourage them to work in Hong Kong both up to and for some
years after 1997. However, in the first round of
consultations, the HMOCS Association rejected this approach.
They argued strongly that it was not in line with previous
schemes, and that it would in effect force officers to
continue serving under Chinese sovereignty to earn
compensation to which they were entitled. The Association
have said they will not accept anything less than a scheme on
traditional lines.
6. Our revised compensation proposal (Option C in the paper)
meets these points. Under this scheme officers will have to
be prepared to work to the hand-over date to benefit from the
scheme. It is thus designed to retain their services until
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