TNAG-2417-FCO40-3519-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 139

aefl.mr/kw/16.17.1

Ра

HONG KONG:HMOCS PENSIONS

-

CONFIDENTIAL

HKA 233/1

Handed out by

Treasu

cet reét

with Margolis er

24/1/92.

(14)

Meill

Annotated agenda basis for discussion with Richard Margolis, Smith New Court. Exploratory discussion, without commitment.

Background

Mr Margolis will be aware of Hong Kong HMOCS'concerns about maintaining the sterling value of their pension entitlements

up to and beyond 1997; HKG (and from 1997 SARG) and not HMG legally responsible for HMOCS' pensions;

under

Treasury, ODA and GAD met with HKG officials before Christmas

to discuss HMOCS' concerns; among the options

consideration were:

1

(i) to provide no safeguard (ie do nothing)

(ii)

for the HKG to capitalise HMOCS' pension entitlements (UK proposal with sub-options set out at Annex A);

(iii) use of private sector intermediary to fund and/or

manage HMOCS' safeguard;

Sub-options common to (ii) and (iii) include:

(i) extent of pensionable service covered (eg all

pensionable service, or service up to 1/1/92?);

(ii) timing of the takeover of pension payments from HKG (eg

from 1/1/92 or from 30/6/97?)

(iii) coverage and proportion of pension liability in capital

form versus stream of future payments;