there were a number of other financially contentious issues involving Hong Kong which remained to be resolved.
What form of Scheme?
13. One option which was previously considered, and rejected, by
Ministers is to introduce a "traditional" form of General
Compensation Scheme (see para 4 and 5 above) which would provide all
HMOCS members in Hong Kong with an actuarially assessed one off
lump sum payment in 1997 and immediate payment of pension to those
who wish to retire in or after 1997. The "traditional" Scheme
would not be appropriate, not only on grounds of cost, but also
because of our commitment under the Joint Declaration to do all we
can to bring about a smooth transition. This should include encouraging expatriates to stay on. Full payment of compensation and pension in 1997 would given them no incentive to do so; indeed it would probably encourage them to leave. We have always judged that the Chinese would oppose a Scheme which had such a result.
14.
Ministers therefore concluded in 1988 that a modified
compensation Scheme, providing a positive incentive to expatriates to stay on after 1997 but without the full benefits for loss of
career given under a "traditional" Scheme, would, in political terms, offer the best prospect of reconciling the conflicting
interests. They endorsed a Scheme which would provide a limited payment in 1997 to compensate for the loss of the Secretary of State's protection (say one tenth of the full payment that would have been made were an officer to have retired at independence
under a traditional scheme), plus 9 further payments for each year
that a HMOCS member remained in service after 1997. This would
fall short of what HMOCS officers in Hong Kong would hope to
receive. But it would be defensible and arguably consistent with
the intentions of the 1960 White Paper.
15.
Since the Ministerial decision of 1988, we have considered an
alternative means of devising a Scheme to provide HMOCS members
WEDABH/5
CONFIDENTIAL
No comments yet.
Private notes are available after approval.