TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 89

Background

HMG'S POLICY

CONFIDENTIAL

A

3.

HMG's current policy dates from March 1985 when OD(K)

considered a minute from Sir G Howe to the Prime Minister on

treatment of Hong Kong members of HMOCS. One of the conclusions endorsed was that "HMG should aim to negotiate

safeguards for the sterling value of pensions earned up to 1997, the cost being met by the Hong Kong Special Administrative Region Government. Further study should be

given to the nature and timing of such safeguards, and there

should be discussion with HKG". The attached note is an

extract from Sir G Howe's minute.

4.

The rationale for HKG/SARG meeting the bill was that the

payment of pensions at a guaranteed rate against sterling

for members of HMOCS was one of the features included in

most Public Officers' Agreements concluded with colonies

immediately before independence. The financial liability, as with compensation for loss of career, was regarded as one for the newly independent country to meet. In practice,

however, HMG's pension takeover programme, initiated in

1970, removed this burden from most of our former colonies.

Hong Kong, and other wealthy dependencies, were excluded from the takeover arrangements. Our view, therefore has been that the question of sterling safeguards for Hong Kong pensions is a matter for that Government. We have however

recognised privately that the pressure on HMG to introduce a sterling safeguard could become intense as 1997 approached.

RODACP/2

CONFIDENTIAL