TNAG-2101-FCO40-2990-HM-Overseas-Civil-Service-(HMOCS)-policy-matters-1990 — Page 152

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CONFIDENTIAL

FM HONG KONG

TO PRIORITY F C O

TELNO 3361

OF 15095OZ NOVEMBER 90

CONFIDENTIAL

нив 431 16

21:09:290

INFO ROUTINE PEKING, UKREP JLG HONG KONG

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074323 MDLIAN 7138

YOUR TELNO 2056: CIVIL SERVICE PENSIONS: NOTE FOR THE CHINESE

WE TAKE YOUR POINT ABOUT POSSIBLE SENSITIVITIES ARISING FROM THE PENSION EXPENDITURE FORECAST. WE WILL REVISE THE FORECAST TO SHOW PENSION EXPENDITURE AS A PERCENTAGE OF OPERATING EXPENDITURE. CA COPY WILL BE FAXED TO YOU SHORTLY). HOWEVER, YOU SHOULD BE AWARE THAT A TABLE SHOWING PENSIONS AS A PERCENTAGE OF SALARIES WAS HANDED TO THE CHINESE WHEN THE NEW PENSION SCHEME WAS DISCUSSED IN 1986. AS FOR THE PROPOSAL IN THE LAST SENTENCE OF TUR, WE FEEL THAT TO INCLUDE THIS IN THE SPEAKING NOTE WOULD GIVE THE MATTER TOO MUCH PROMINENCE. WE WOULD PREFER TO INCLUDE IT IN OUR DEFENSIVE BRIEF. IN THIS CONNECTION, WE WOULD APPRECIATE ANY INFORMATION YOU MAY HAVE ON PENSION BILLS OF OTHER GOVERNMENTS.

2.

WE HAVE AMENDED

PARAGRAPH 9 OF THE SPEAKING NOTE TO READ:

'WE HAVE NO INTENTION OF FULLY FUNDING PENSIONS. IT WOULD BE QUITE WRONG TO SET ASIDE A VERY LARGE SUM OF MONEY FOR THE CIVIL SERVICE AT THE EXPENSE OF THE HONG KONG COMMUNITY AS A WHOLE. THE PRESENT POLICY OF PAYING PENSIONS FROM GENERAL REVENUE, WHICH ALLOWS PENSION LIABILITIES TO BE MET AS THEY ARISE AND SPREADS THE COSTS OVER MANY YEARS, IS CONSIDERED MOST APPROPRIATE TO HONG KONG'S CIRCUMSTANCES.'

3.

SUBJECT TO ANY FURTHER VIEWS YOU MAY HAVE, WE SUGGEST UKREP JLG SHOULD FOLLOW-UP ON THEIR EXCHANGE WITH THE CHINESE (UKREP TELNO 73 REFERS) TO INFORM THEM THAT A COMPREHENSIVE BRIEFING ON PENSION MATTERS BY HKG HAS BEEN PREPARED AND TO AGREE WITH THEM

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