poor. At the stage of assuming responsibility for the payment of individual pensions the Minister of Overseas Development would be prepared to take over widows and orphans pensions too so long as the assets of the funded systems were transferred to HMG.
COMMUTATION AND COMPENSATION
47. HMG has traditionally ensured that overseas officers whose careers are prematurely terminated because of constitutional developments in the countries in which they serve should receive a payment in compensation as well as earned pension. In many countries the cost of these payments has proved burdensome and has provoked strong local opposition.
48. In recognition of difficult local situations HMG has provided funds to pay all compensation in respect of overseas officers who served in Cyprus, British Somaliland, Sarawak and Sabah and is now doing the same in respect of Southern
More generally OSAS provided for the payment by HMG of one half the cost of compensation in respect of compensation schemes arising after its introduction.
Yemen.
49.
HMG has also made substantial loans on evidence of need towards the other half cost of compensation and towards the commutation for a lump sum of a part
By 1971 the overseas governments will have
of officers' earned pensions.
repaid £3.6m on these loans
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£2.8m interest and £0.ŏm capital repayment
leaving a total sum outstanding of £50.4m due to be paid in annual instalments up to 1993 (this sum would be increased to £52.7m if £2.3m not yet drawn upon
Approximately £2.5m would be payable each year in the peak
were taken up).
period 1975-86.
The burden of these payments is strongly resented and Kenya
has proposed that HMG should waive further repayments.
50.
In respect of compensation and commuted pensions the Minister of Overseas Development proposes that as from 1 April 1971, HMG should assume the same
measure of financial responsibility as that proposed for pensions in paragraphs
26
C
29 above. In consequence the Minister proposes to treat similarly the compensation and commutation loans:
the practical effect of this is the total
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CONFIDENTIAL
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