CONFIDENTIAL
ANNEX D(5)
STERLING SAFEGUARDS
FCO/ODA Scheme
1. This scheme is essentially the traditional arrangements funded by HMG, minus the right to retire in 1997 with early payment of pension. (Compensation is a separate issue.) It would thus simply involve a sterling safeguard for pensions at a rate to be determined but recommended at 16:1 ie well below the present exchange rate and the average rate over the past two or threee decades (see Annex D (1) para 6). scale of HMG's contingent liability under such a scheme would obviously depend upon the rate fixed, plus any other variable features such as linking such a safeguard to ensure comparability of treatment with UK counterparts. Since the main aim of the scheme is to keep HMOCS members in Hong Kong, it is proposed that all service, including service post 1997, would qualify to be safeguarded.
NC3 AAB
CONFIDENTIAL
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