CO129-601-1 Salaries Commission- currency basis of emolument 9-1-1948 - 5-6-1948 — Page 16

H' Mayle

I have

plaad

conson

Treasury.

a

draft

13 Gov.

tel.391

opposite

16

for

to the

letter

BRanked

1614

16-4-48

:

Yes.

Well, virtually and morally. certaii.

:

Mr.Seel

With reference to X in Mr.Mayle's minute,

the Treasury seem to be determined to make me. popular in my new Department ! However,

I have, as requested, had a look at these papers.

I am in general sympathy with the desire of those concerned to have some certainty..

On the other hand I am not really happy about the Governors formula as it now stands.

(a)

(b)

I assume :

That the rate of pension is a given proportion of salary rate for the last year, or few years, of service.

That if there were, in fact, a substantial depreciation of the Hong Kong dollar it is virtually certain that there would, sooner or later, be a substantial

compensating increase in salary rates.

If both these assumptions are correct, the position would surely then be that, if there were a substantial depreciation of the Hong Kong dollar, then expatriate officers retiring subsequently would, under the Governors formula, get much too high a rate of pension.

If the above analysis is correct, then it would presumably be necessary to add to the Governor's formula a stipulation to the effect that, if there were a change in salary rates, the conversion rate for pensions payable in sterling would automatically come up for

reconsideration.

Subject to the above point (on which you may want to consult with C.S.D.) I see no objection to the Governor's proposal being put to the Treasury.

I agree with Mr.King that the option should be irrevocable; but I had assumed that this was, in fact, the intention.

W23.

20th April 1948.