CONFIDENTIAL
HKB +31 16
E!
CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
OF 150945Z NOVEMBER 90
TELNO 3359
76,
PERSONAL FOR PAUL HKD FROM GOVERNOR
TOP COPY Q DIST ?
YOUR TELNO 2000 : STERLING SAFEGUARDS AND COMPENSATION ARRANGEMENTS
86
074035 MDHIAN 9472
1. YOU ASKED FOR OUR PRELIMINARY VIEWS ON THE PROPOSAL (PARA 4 OF TUR) THAT HMOCS MEMBERS SHOULD BE ABLE TO TAKE THE VALUE OF THEIR ACCRUED PENSION RIGHTS AT ANY TIME BETWEEN NOW AND 1997 AND PURCHASE A PENSION FROM A PRIVATE SECTOR PROVIDER.
2. THIS IS NOT A PRACTICAL OPTION AS FAR AS WE ARE CONCERNED.
LOCAL OFFICERS ARE PRESSING FOR THEIR PENSIONS TO BE CASED IN BEFORE 1997. THERE IS NO WAY IN WHICH WE COULD PAY OFF HMOCS PENSIONS WITHOUT BEING PREPARED TO DO THE SAME FOR ALL THE OTHERS. TO DO THE LATTER IS SIMPLY NOT FINANCIALLY POSSIBLE. EVEN IF IT WERE, ANY GENERAL CASHING IN OF PENSIONS WOULD BE TOTALLY UNACCEPTABLE TO THE CHINESE.
3. WE MUST AGAIN STRESS THAT HKG HAS AN EQUAL OBLIGATION TO ALL ITS STAFF, BOTH LOCAL AND OVERSEAS. ANY SPECIAL OBLIGATION TO MEMBERS OF HMOCS MUST FALL TO HMG.
4. WE CAN APPRECIATE YOUR CONCERN (PARA 3 OF TUR) AT THE COST IMPLICATIONS IF HMG WERE TO PROVIDE STERLING SAFEGUARDS FOR HONG KONG MEMBERS OF HMOCS. HOWEVER, UNDER OUR PROPOSAL THIS COST IS UNLIKELY TO BE HIGH: INDEED HMG COULD WELL GAIN 9SEE THE CALCULATIONS BEING FAXED SEPARATELY TO YOU). MOREOVER, WE DO NOT UNDERSTAND WHY THE PROVISION OF STERLING SAFEGUARDS ''COULD HAVE REPERCUSSIONS ON PENSIONS AND BENEFITS POLICY GENERALLY''. BY PROVIDING SUCH SAFEGUARDS TO HMOCS MEMBERS IN HONG KONG, HMG WOULD ONLY BE FOLLOWING THE PRECEDENT OF WHAT IT HAS ALREADY DONE
IN RELATION TO HMOCS MEMBERS FROM OTHER TERRITORIES. NOR DO WE SEE WHY THE SCHEME WE HAVE PROPOSED SHOULD SEND A WRONG SIGNAL ABOUT HMG'S CONFIDENCE IN THE FUTURE OF THE HONG KONG ECONOMY. WHAT WE ARE TALKING ABOUT IS THE PRESERVATION OF THE VALUE OF HMOCS PENSIONS IN STERLING TERMS, WHICH IS SOMETHING TO WHICH HMG HAS SURELY ALWAYS BEEN COMMITTED. YOUR ALTERNATIVE PROPOSAL WOULD
1
PAGE
CONFIDENTIAL
No comments yet.
Private notes are available after approval.