TNAG-2398-FCO40-3485-Hong-Kong-Civil-Service-policy-1992 — Page 35

of

Wovember 1992

Allan Rogers Esq MP House of Commons

LONDON

SW1 OAA

FINAL PL.

G. 25/11

11.

HONG KONG CHINESE CIVIL SERVANTS ASSOCIATION

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Thank you for your letter of 19 November to Douglas Hurd enclosing a copy of a submission given to you by

representatives of the Nong Kong Chinese Civil Servants Association (HKCCSA).

27.

I met Mr Wong and Mr Tang from the Association during their recent visit to London and was able to hear their concerns at first hand. They are aware that the Joint Declaration (JD) and the Basic Law contain important provisions requiring the Special Administrative Region Government (SARG) to continue to pay pensions after 1997 on terms no less favourable than before; and also that pensions are now a statutory right and charge on the general revenue. It was evident from their discussions with me and with officials that they are not concerned that the SARG will fail to honour the provisions in the JD and Basic Law, but rather that the SARG may get into such financial difficulty that the government cannot afford to pay pensions from general revenue. The HKCCSA and other staff associations have therefore proposed the establishment of a pension reserve fund capable of funding pensions for a period of 5 years.

Both HMG and the Hong Kong Government recognise that this is an issue of concern to many civil servants. However, it is almost inconceivable that the Hong Kong Goverment or the SARG would ever be in a position where they could no longer afford to pay pensions, which at present constitute only 3-4% of general revenue.

To set up a pension reserve fund along the lines proposed by the HKCCSA would require a sum of about HK$15 billion to be set aside from the Hong Kong Government's reserves and placed into a separate account. This money would then be permanently unavailable for the provision of public services for the benefit the wider community. The Hong Kong Government have to weigh this consideration against the concerns expressed by civil servants.

rog.let.SA

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