TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 51

CONFIDENTIAL

14. If Ministers accept that HMG would have to take responsibility for the pensions of HMOCS in Hong Kong in the event of a default the question arises whether we should initiate a formal take-over of the

pensions at or before 1997. This would be on lines which have

become standard elsewhere, but with the important difference that

Hong Kong, which i s not aid-worthy, would me et the cost.

question arises irrespective of whether or not i t proves necessary to reaffirm the Carr-Robertson Assurance). The main argument for

to extinguish the

i s not

estimate

(The

inconsiderable.

taking over responsibility is financial contingent liability. The money at stake

Excluding widows' benefits, for which по

is currently available, expenditure on pensions would be approximately £10 million pa (at 1984-85 prices and exchange rates) at the turn of the century. The trend would be downwards, but the liability would not be finally extinguished until 2040. HMG would have to finance this

itself if the SAR Government defaulted. The risk would be avoided

by arranging for responsibility to pass to HMG before Chinese

sovereignty is resumed: the Hong Kong Government would finance the pensions by handing over capitalised values of the entitlements (if

necessary in a phased programme). As at 1997, these would be in the region of £210 million at 1984-85 prices and exchange rates.

15. The Hong Kong Government i s strongly opposed to

because of the divisive effect this would have on

service.

a take-over

the public

I t would also be difficult to persuade the Legislative

Council to approve the £210m representing the capitalised value of

the pensions.

Moreover, action оп HMOCS pensions by HMG would

inevitably undermine our reas sur ances

Agreement; indeed there i s

on the credibility of the

a case for leaving responsiblity for

as a mark of our faith in the

is therefore against early

these pensions with the SAR Government

Agreement. The balance of argument action, but the question should be looked at again, perhaps in about

1990.

IF

1997 CONTINUE ΤΟ

NOT SHOULD OTHER

SHOULD HMOCS OFFICERS WHO REMAIN IN SERVICE AFTER

BE REGARDED BY HMG AS MEMBERS OF HMOCS?

ARRANGEMENTS BE INTRODUCED ΤΟ MAINTAIN THE BENEFITS NORMALLY

ASSOCIATED WITH MEMBERSHIP OF HMOCS?

16. The main benefits of HMOCS status that would be relevant to

CONFIDENTIAL