that
something is better than nothing, he would in these circumstances opt reluctantly for the New Pension Scheme. In the absence of any undertakings from HMG or HKG it would be rash not to do so. But if HMG's arrangements, when eventually announced, included the right to leave the service in or before 1997 without loss of earned benefits under either pension scheme, then the officer's sacrifice of part of his benefits as a result of opting for the New Pension Scheme would have been unnecessary.
He would have been cheated of part of
his pension by the inability of HMG and HKG to coordinate the working out of the HMOCS arrangements and the deadline for the New Pension Scheme.
I suppose it is possible that HMG's arrangements might include a lump sum payment calculated to take account of years remaining before retirement (as I think the limited compensation scheme does), in which case the greater payment received by an officer on the New Pension Scheme might to an extent offset the loss incurred by joining that scheme in the first place. But this is speculation and, in the absence of any announcement of the arrangements, an informed decision is impossible.
I hope that you will accept the view put forward in this letter and that you will liaise with HMG to ensure HM OCS officers are told details of the proposed arrangements well before they have to decide on the New Pension Scheme.
I am writing to you separately today on other (c) aspects of HMG's arrangements.
Yours over,
Alahair
(A. Sinclair)
Principal Assistant Secretary
Monetary Affairs Branch
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