TNAG-0205-FCO40-241-Pensions-policy-1970 — Page 136

CONFIDENTIAL

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OVERSEAS PENSIONS

In view of the mounting criticism of our traditional policy on overseas

pensions, as well as the possibility of default by Kenya and other East African

countries, the Minister of Overseas Development has decided to propose to the

DVO Committee, at an early appropriate time in the light of the results of the

current PESC review, that HMG should take over the pensions paid by overseas

Governments to expatriate public service pensioners,

2.

The main elements of the proposals he has in mind are

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(i) Britain should offer to take over from 1st April 1971 the

portion of these pensions which relates to pre-independence

service with the Governments concerned.

(ii) A similar offer should be made in respect of commuted pensions.

thus relieving the overseas Governments of the pre-independence

portion of the commutation loans; at the same time the

portion of loans remaining to be met by overseas Governments

would be made interest-free.

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(iii) Outstanding compensation loan repayments would be waived in

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(iv) There would be no retrospection in these arrangements.

(v) The money for these concessions would probably be found from Principla inlley.

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3.

The chief issues on which FCO views would be welcome are which countries

(if any) might be excluded from the new arrangements, and what (if anything)

should be done about Asian pensioners in East Africa.

There are three categories of country which might be omitted from the

take-over

•

The first are those whose pension payments are well established

historically, i.e. India, Pakistan, Burma and Egypt, together with Israel and

Jordan in respect of the former Palestine Mandate, and three other special

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Compensation.

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