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arrangement whereby HMG took over responsibility for the payment of HMOCS pensions at an agreed sterling rate, the Hong Kong Government would pay over to HMG the capitalised value of all such pensions. The sum involved would need further negotiation. The Treasury indicated that they would be willing to consider payment of this-capitalised value by instalments, provided payment was completed before 1997. The Hong Kong Government are considering this proposal. would entail considerable difficulties for them, since it would involve the payment of substantial sums of money to protect the pensions of HMOCS officers, without a comparable guarantee for local officers. There would probably also be difficulties vis a vis the Chinese. On the other hand, Treasury agreement to assume responsibility for payment of HMOCS pensions would be a very valuable prize.
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Sir David Ford will be briefed about the outcome of these discussions but is unlikely to go into much detail with Lord Caithness, as he will not yet have had an opportunity to consult the Governor.
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