TNAG-2418-FCO40-3520-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 87

GENERAL BRIEF

FONG KONG

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GOVERNMENT PENSIONS AND HMOCS PENSIONS

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1. Under the terms of the Joint Declaration, the Chinese Government has agreed that the future SARG she be responsible for the payment of all Government pensions.

have nurgason to doubt that the Chinese side will abide by this undertaking, If, however, the SARG failed to uphold this obligation to pay the pensions of local government officers, there would be no legal obligation on HMG to cover the cost, which could amount to Billions of pounds. response would depend in part on the political circumstances and would be for the government of the day to decide.

2. HMOCS. In all other territories moving to independence from Britian HMG has made arrangements to pay HMOCS

to recer officers compensation for the loss of the protection of the Secretary of State and loss of career, to allow the early retirement with immediate payment of pensions, and to protect the sterling value of their pensions. Hong Kong HMOCS members expect the same and have been agitating for HMG to announce what it intends to do: the issue has been under consideration in Whitehall since 1985.

3. The numbers involved are large. There are about 700 current and 300 potential HMOCS officers in Hong Kong, of whom about 600 are in the police and 100 in the administrative grades. It is impossible to predict with accuracy how badly HMOCS members would receive a decision. which did not meet their expectations.

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4. There is no legal obligation on HMG to provide either compensation or a sterling safeguard for HMOCS pensioners in Hong Kong. The argument of HMOCS officers here is based on

OF precedent in other colonies and on wording in two previous White Papers. The FCO, ODA and HKG have agreed a package proposàl, much reduced from traditional schemes, which we hope would keep HMOCS officers in Hong Kong, would not be too devisive vis à vis local officers, and which would not provoke unmanageable Chinese suspicions. It involves a small element of compensation in 1997, followed by up to 8 annual payments (at a total cost of roughly £20 to £30 million), to try to encourage HMOCS members to stay on. The package would also include a sterling safeguard for the pensions. If the Hong Kong dollar maintained its value, the safeguard would cost us nothing; if however the Hong Kong dollar were to become worthless, the total cost to HMG, spread over a 40 year period, could be between £200 to £300 million. While we believe that the Treasury accepts the

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