PRIORITY
THE MAIN
CONCERN,
WE HAVE
CONCLUDED
RATHER THAN
dollar. Itsoomsteus, therefore that,
that it would be unwise to proceed with a compensation/incentive scheme in isolation,
SHOULD
Vibe WE
need to look at the various factors which will affect the willingness of HMOCS members to remain in Hong Kong and put together a coherent package of proposals which will achieve the objective of retaining HMOCS most cost effectively.
IT SEEMS CLEAR THAT IF
IS
3. The question of a possible sterling safeguard for pensions/ THEN WE MUST SEEK TO ADDRESS IT.
will inevitably arise. The costs of any such safeguard could in
BRITISH theory be met either by the Government or the Hong Kong
ADVIJE
Government. I have to tell you, however, that any suggestion of a sterling safeguard by HMG would be strongly resisted in SOME QUARTERS IN Whitehall. The public expenditure consequences Could be
VERY SUBSTANTIAL INDELD
IN ADVANCE
Open-ended, potentially enormous and repercussive. There would also be the question of the signal any such move would give to the markets about HMG's confidence in the future of the Hong OF MINISTERIAL
Kong economy. These concerns will not be easily overcome, and it
TO MAKE ANY ABOUT THE ATTITUDE ONSIDERATION Nould be unrealistic to foster any presumption that Ministers
presumption/that would be prepared to agree to a sterling safeguard, either now or
FORESEEABLE
OF THE STERLING
TAKE
in the future.
SAFEGUARDS
IT
ISQUES,
OTHER
WOULD
WRONG
4. In this context, we have been considering ways of dealing TACKLING THE
We have sketched out bele
with potential problems on HMOGS Pensions .
one option and consideration of it may lead to the identification of others which we think has real attractions.
COULD HAVE
It needs a good deal of further work and refinement but in outline it would involve individual HMOCS members being able to take the value of their accrued pension rights from the Hong Kong Government at any time between now and 1997. The transfer value would be used to purchase a deferred annuity or personal pension from a private sector provider. Although it would probably be reasonable to stipulate that the transfer values must be used to purchase benefits payable in retirement, each
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