TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 72

CONFIDENTIAL

to irresistible pressure on HKG to do the same for

local officers.

The current "10% scheme" will fulfil (i) (a) and possibly

(i)(b) and (i)(c) and (iv). HMOCS members will however be outraged and could frustrate (i)(b) and (C) as a result. The Chinese reaction is unknown, but possibly hostile. is therefore worthwhile looking at other options.

It

There are innumerable options on what type of scheme could

be introduced. Those range from

(a) a traditional scheme: compensation and early payment of pension. This would be very expensive (£160 million), would definitely encourage HMOCS members to stay until 1997 but would then lead to the early departure of large

numbers of HMOCS members and possible cause problems for

HKG re local officers.

(b) a compensation scheme without early payment of pension: the compensation could be paid over several years but would be guaranteed if the officer was in post

on 1 July 1997. This could be acceptable to HMOCS members but would be relatively costly (£42 million). would encourage HMOCS members to sltay until 1997 but could lead to an exodus of HMOCS members in 1997 although

clearly less than (a), with less problems for HKG.

It

(c) an incentive scheme front loaded to provide sufficient incentive to stay up to 1997 but possible not

long thereafter. This would be less expensive than (b) but possibly not much, would not be welcomed by HMOCs members but might be effective in retaining reasonable numbers up to and beyond 1997. The Chinese might however

object.

ALDAEU/2

CONFIDENTIAL