TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 142

CONFIDENTIAL

A

Extract FROM

Froid SIR G Howie's

MINUTE

01

7 MARCH 1985

SHOULD ARRANGEMENTS BE INTRODUCED TO SAFEGUARD THE STERLING VALUE OF PENSIONS EARNED FROM HMOCS SERVICE UP TO 1997?

9.

The standard

remitted overseas

arrangement

enables

the pension to be freely

at the rate against sterling in force at

independence. The burdens thus imposed on the successor governments in effect to pay sterling pensions have been largely removed by

the pensions take-over programmes.

to associations

10. The sterling value of Hong Kong pensions i s at risk now, SO there is pressure from pensioners'

introduce a

sterling safeguard immediately. The pressure will intensify as 1997 approaches if HMG makes no move to take over the pensions concerned.

Given that this

standard package for HMOCS it is not

such a safeguard is

assumptions, i.e. i f

open

this is part of

to argue that

to HMG

unjustified. On worst case

or

unnecessary

the Hong Kong

be the sterling

paid by Hong Kong, which is

Our aim should therefore be to

the

(later Hong Kong

dollar became worthless, the cost to HMG would

value of pensions and

currently £10.5 million

increases

per year.

enter into arrangements whereby

"

the SAR)

Government accept this obligation. (It should be recognised that,

i f we

there would be pressure failed to achieve this aim, there would be

on HMG to

me et this obligation, and in the last resort since HMG has me t it elsewhere, such pressure would be very difficult to resist. If it

did become necessary for HMG to meet the obligation, it could do SO by manipulating the pension supplement payable from UK funds, for

which HMOCS pensioners are already eligible. Nevertheless such

should be pressure

strongly resisted.) officials should study further how such

how such a scheme might operate, and

that we should start discussions with the Hong Kong government about

In the meantime the public line should be that we are aware of

precedents, and that our aim wi il be to see arrangements made for HMOCS officers in Hong Kong.

it.

the

I t

is

recommended

that

comparable

CONFIDENTIAL