TNAG-2100-FCO40-2989-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 97

CONFIDENTIAL

Fxtract FROM

SIR G HOWIE'

MINUTE

2/0

A

7 MARCH 1985

SHOULD ARRANGEMENTS BE INTRODUCED TO SAFEGUARD THE STERLING VALUE OF PENSIONS EARNED FROM HMOCS SERVICE UP TO 1997?

9.

The standard

arrangement

enables the pension to be freely

remitted overseas

at the rate against sterling in force at

independence. The burdens thus imposed on the successor governments - in effect to pay sterling pensions have been largely removed by

the pensions take-over programmes .

-

is at Hong Kong pensions

risk now, SO

associations pensioners'

to introduce

a

10. The

of sterling value

there is

from pressure sterling safeguard immediately. The pressure will intensify as 1997

approaches if HMG makes по move to take over the pensions concerned. Given that this is part of

of the standard package for HMOCS it is not

to argue that such a

is safeguard

On worst case assumptions, i.e.

the Hong Kong

the cost to HMG would be the sterling

increases

paid by Hong Kong, which is

per year. Our aim should therefore be to

arrangements whereby

open

to HMG

unjustified.

dollar became worthless,

value of pensions and currently £10.5 million

enter

into

the

,

i f

unnecessary or

the SAR)

it

it

so

for

(later Hong Kong Government accept this obligation. (It should be recognised that,

if we

on HMG to failed to achieve this aim, there would be pressure

meet this obligation, and in the last resort since HMG has me t elsewhere, such pressure would be very difficult to resist. I f did become necessary for HMG to meet the obligation, it could do by manipulating the pension supplement payable from UK funds, which HMOCS pensioners are already eligible. Nevertheless such

should be strongly resisted.) pressure officials should study further how such a scheme might operate, and should start discussions with the Hong Kong government about

In the meantime the public

the public line should

line should be that we are aware of

precedents, and that our aim will be to see comparable arrangements made for HMOCS officers in Hong Kong.

that we

it.

the

I t

is

recommended

that

CONFIDENTIAL