CONFIDENTIAL
7. Set against these very telling arguments is the fact
that, if things were to go badly wrong in Hong Kong and the
SARG to refuse to meet payments of pensions for HMOCS
members, HMG would in all probability be forced to pick up the tab. The liability for this was calculated in 1985 to
be approximately £10.5 million per annum, at 1983/84 salary
levels and exchange rates. A fluctuating liability would
continue until about 2040.
8.
In conclusion, I recommend that it is impossible to pursue the option of attempting to obtain from HKG the
capitalised value of HMOCS pensions up to 1997. HMG should
therefore recognise that in the worst case scenario where
the Hong Kong dollar became worthless or the SARG refused to
pay pensions for HMOCS members, HMG would have a liability which was to approximately £10.5 million in 1985 (this
figure to be up-dated by the ODA) and would continue until
about 2040. I recommend that a short submission on this
should be put to Ministers.
RODACQ/4
M V Stone
CONFIDENTIAL
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