10 MAY '93 10:24
H M TREASURY AEF DIV
P.8
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need
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to bring out in the
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сверить
i adequate.
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the
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"
What, then, is the level of compensation required by the 1954 White Paper? There is nothing in the Paper to amplify the bare reference to 'compensation' in paragraph 6(6) quoted above. The 1960 White Paper says a little more. Paragraph 9(e) of that
"while it Paper begins
remains
of HMG that policy career for loss of compensation
on payable
premature retirement to members of HMOCS
(my emphasis). This is presumably a reference to the policy created by the 1954 paper, paragraph 6(6), from which it may be inferred that the substance of the obligation to compensate is the same under both Papers, the differences being merely in the framework of agreements for delivering that end result.
If that is so, the provisions of paragraphs 13,16 and 17 of the 1960 Paper
Paper may
may be relevant to the
the the interpretation of substantive obligation under the 1954 Paper. Insofar as they indicate that HMG retains a certain amount of discretion in deciding the details of the compensation arrangements, they are helpful to HMT's line on the Hong Kong question. Paragraph 13 expressly contemplates that there may need to be variation in the details from one territory to another so that they can be 'shaped to meet the particular circumstances of the territory concerned' albeit within the constraints of paragraph 9 and the 'broad objectives of the arrangements'. Paragraph 16 also indicates
in terms of maximising the incentive effect flexibility in compensation packages. Paragraph 17 begins by repeating the proposition that each scheme will be negotiated individually 'in the light of the circumstances prevailing in the territory'. That paragraph goes on to state that there are, however, certain Sub- broad principles which HMG think should be applied. paragraph (a) would seem to be most relevant, despite its reference to control passing to a 'Public Service Commission'. The principles may be thought to apply mutatis mutandis in the present context. They refer to actuarial advice taking account of age, salary and length of service.
of
It is not entirely clear to me what
what the factors which are actually used are. In the absence of Mr Raynes, I spoke to Mr Brancen who suggested I speak to the Government Actuary's Office. I spoke to Mr Johnston there but am given to understand that the relevant people are unavailable until Monday.
On the assumption that the calculations proposed to be used here are, apart from the 50% reduction, perfectly justifiable and entirely in accordance with previous practice, the only question is whether the making of such a reduction and the application of the cap proposed (which would bite more than in the traditional scheme) open the way for legal challenge.
The legal grounds for review
You will recall the advice of Mr Charles of Treasury Counsel last year on the question of sterling guarantees of pensions. The traditional view is that legitimate expectations or a duty to act fairly cannot create substantive rights as opposed to procedural rights. However, this area of law is developing in a direction
COTUNDENTIAL
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