TNAG-2099-FCO40-2988-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 109

CONFIDENTIAL

this

4316

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TRY

JUN 1990

DFSK

CONFIDENTIAL

FM HONG KONG

TO PRIORITY FCO

TELNO 1889

OF 15080OZ JUNE 90

INFO PRIORITY PEKING, UKREP JLG HONG KONG

040545 MDLIAN 9163

Paluaj

UKREP JLG TELNOS 45 AND 23 : CIVIL SERVICE PENSIONS

(16) Ciga

1. WE CONSULTED EXCO ON 15 MAY ON THE PROPOSALS TO MAKE PENSION INCREASES AGAINST PRICE INFLATION AND A STATUTORY RIGHT. EXCO AGREED IN PRINCIPLE BUT DIRECTED THAT CONSIDERATION SHOULD BE GIVEN AS TO WHEN THE PROPOSAL SHOULD BE INTRODUCED, HAVING REGARD TO THE MOST SUITABLE TIMING FOR CONSULTATION WITH THE CHINESE. IN MAKING A FURTHER SUBMISSION TO EXCO, ACCOUNT SHOULD ALSO BE TAKEN OF THE PREVAILING MOOD OF THE COMMUNITY AND THE CIVIL SERVICE IN THE LIGHT OF DEVELOPMENTS ON THE NATIONALITY AND PENSION SAFEGUARD FRONTS. PRESENT THINKING IS THAT WE SHOULD CONSULT THE CHINESE SOME TIME IN THE AUTUMN.

2. PARA 1 OF 2ND TUR REPORTED THE CHINESE REQUEST FOR A BRIEFING ON CIVIL SERVICE PENSIONS, WHICH WAS BROUGHT TO EXCO'S ATTENTION. WE NOW INTEND TO ARRANGE A COMPREHENSIVE BRIEFING SESSION FOR THE CHINESE TO :

(A) PROVIDE A SITUATION REPORT ON THE NEW PENSION SCHEME FOLLOWING ITS IMPLEMENTATION ON 1 JULY 1987:

(B) EXPLAIN THE PROPOSALS RECEIVED FROM STAFF FOR PENSION SAFEGUARDS AND OUR INITIAL ASSESSMENT OF THEM (PARA 5 OF 1ST TUR REFERS). WE WOULD NOT OF COURSE OFFER ANY CONCLUSIVE OBSERVATIONS AT THIS STAGE, EXCEPT TO RULE OUT FUNDING, BECAUSE NONE OF THE PROPOSALS CAN BE PURSUED IN THE SHORT TERM DUE TO RESOURCE LIMITATIONS. WE WOULD SAY THAT WE NEED MORE TIME TO STUDY IN-DEPTH THE IMPLICATIONS OF THE VARIOUS OPTIONS AND THAT WE WILL CONSULT THE CHINESE IN GOOD TIME ON PROPOSALS WITH IMPLICATIONS FOR THE SARG AND

(C) INFORM THE CHINESE OF A NUMBER OF PROPOSED CHANGES TO PENSION ARRANGEMENTS, INVITING ANY VIEWS THEY MAY HAVE ON THEM

(I) THE PROPOSED CHANGES TO DEPENDANT PENSIONS AND RELATED BENEFITS (OUR TELNO 1013

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