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CONFIDENTIAL
payments for each year an HMOCS member remained in service
after 1997. Such an arrangement would fall well short of
what HMOCS officers in Hong Kong would have hoped to
receive, but this was judged to be manageable.
6. In discussions with the Governor we have refined this
scheme to front-load it slightly by going 20% of the
maximum compensation sum in mid 1997 and by reducing the
number of years in which payments would be made from 9 to 8.
We also consider that to avoid arousing Chinese suspicions
no payments should be made until the officer retires or
resigns.
Details of the proposed scheme and how to take it
forward are attached.
COSTS
7. It is extremely difficult to calculate accurately how much such the scheme proposed would cost. This would depend
on:
(a) the number of HMOCS members in service in 1997 and
on how long they remained in service after 1997;
(b)
Hong Kong Civil Service Salary increases between now
and 1997; and
(c)
the exchange rates at the dates of payment.
The cost could be as high as £44 million (at current
exchange rates) in the unlikely event that all eligible
HMOCS officers were to remain until normal retirement age
and all contract officers who had the option to transfer to
permanent and pensionable terms chose to do so: and
"bought back" all their previous service. Equally, if a
high proportion of HMOCS officers were to leave in 1997 or
shortly thereafter, the cost could be relatively low (84 m
to 85 m). A figure midway between these extremes, say
£20-30 million, is probably the most likely. (By contrast a
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CONFIDENTIAL
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