FAUL FIFOCT

To: NIGEL WHITNEY

FAX TRANSMISSION

Hong Kong Department, FCO

Fax No.: 071 270 3387

Pages, including this page: 10.

PLEASE COPY TO: ALAN MCDONALD, ODA

From: PAUL FIFOOT

Fax and tel no.: 0372 723755

Date: 22nd April 1993

for

HKA 233/1

29 1993 TES

F.01 10

114)

HONG KONG: STERLING SAFEGUARDS

1. This and the nexollowing fax contain a revised draft of the Sterling Safeguard Scheme.

2. I have followed the formulae and rules sent to me on 7th April by Alan McDonald with three exceptions:

Alur says we do

Wallis Acti

(a) in Annex I, I have made a distinction between officers who receive a pension before 1st April 1992 (we revise the pensionable emoluments for pensions granted after 31st March 1992 to make them accord with salaries payable in the year 1991/1992) and those who receive a pension after that date; in the former case, I have made the pension as granted the basis for determining the "notional pension" and have not required it to be re-calculated according to the officer's equivalent salary in 1991/1992.

The reason why we have adopted the requirement for re-calculation as at the equivalent grade and salary point in 1991/1992 is to avoid any liability to safeguard pensions granted on the basis of emoluments which may be substantially increased in the future: i.e. we will not guarantee pensions above 1991/1992 rates plus RPI. But that does not mean that we have to bring past pensions up to current salary rates. To do so would surely be not

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