Mr Baxter
нка 233/1
t
L. SEP 1993
knows.
FROM: ALAN N MCDONALD
(Ext 3576 - AH 527) DATE: 23 AUGUST 1993
Cc: Mr Trotter
Mr Plumb
Mr Harper
Mr Whitney HKD/FCO
HONG KONG: HMOCS COMPENSATION SCHEME
We spoke a few days ago about the Compensation Scheme for HMOCS officers serving in Hong Kong and we agreed that it might be a good idea if I were to set out the main features of the Scheme as presently drafted. Unfortunately, I do not have an up-to-date copy of the Scheme as Paul Fifoot (FCO/Legal Adviser) has yet to incorporate the comments and suggestions contained in my minute of 21 July. I will ask the FCO to pursue this shortly.
2. Assuming that there is no change to the method of payment, ie from payment by instalments to a lump sum, the main features of the proposed Scheme are as follows:
(a) the Scheme would come into operation on 30 June 1996. This will allow HMOCS officers to apply for early retirement on pension with the approval of the Governor prior to the transfer of power on 1 July 1997. Such officers must give at least six months notice of their intention to retire;
(b) the "appointed day" would be either 30 June 1997 for those officers who stay on or a date between 30 June 1996 and the 30 June 1997, ie a personal date for those who wish to retire earlier with the approval of the Governor;
(c) the compensation would be calculated on the appointed day based on actual HK salaries as at 1 January 1992 (based on the HK salary review effective from April 1991) converted at the average exchange rate for that year, ie £1: HK$ 13.7609. The resultant figure would be increased through the movements in the Retail Price Index (RPI) to the appointed day (as would the CAP £120,000 set at April 1991 levels);
(d) the figure found through (c) above would then be applied to an actuarially determined factor (found from one of three tables) based on the officers age and length of service on the appointed day. Full factors would be used irrespective of whether the officer choose to retire or stay on. [NOTE: GAD are currently working on a new set of tables which will effectively reduce the factors obtained from the HK Limited Compensation Scheme by 80 per cent. Both the FCO and GAD believe they can justify the reduction on the grounds that HMOCS officers have a continuing career.];
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