TNAG-2421-FCO40-3523-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 169

811/b/let1.2.4

HM Treasury

Peter Ricketts Esq

Hong Kong Dept.

CONFIDENTIAL

Foreign & Commonwealth Office

Whitehall

LONDON

SW1

AT MON

Parliament Street London SWIP 3AG

Telephone 071-270

HKA 233/1

4719

223

HMOCS: COMPENSATION SCHEME

6 April 1992

Mr Stove

203

Thank you for your letter of 2 April.

sews Achèn, talon on a copy. Pa

Ра

soku.

We discussed to Mr Swas.

Tel to Hary Keng

I am grateful to you for explaining in some detail your conclusions on the various points about the compensation/incentive proposals which we discussed on 28 February.

Our

I note that you have looked at the position of contract officers with a view to trying to prevent or discourage them from joining HMOCS. It may be that this objective is in fact too wide. concern, as you will recognise, is not to increase the population who would be eligible for the compensation/incentive payments (or indeed any SPOS improvement if any were agreed). Would it not be possible to limit eligibility for the compensation/incentive scheme to those who were HMOCS on, say, 1 January 1992, thus excluding contract officers from the scheme? You would be neither improving contract officers terms nor worsening their current legitimate expectations if they were to join HMOCS. In essence, you would be keeping the present level playing field in their choice between remaining on contract terms and joining HMOCS.

I see from your letter and from the statement which you enclosed that you have kept open for discussion the question of the timing of payments. The preferred option which we discussed was, I think, the accrual of payments until the officer concerned retired or left the service. Although you say that a system of periodic, eg annual, payments would have no implications for the cost of the scheme, it would of course bring forward the payments and thus increase the scheme's overall net present cost. We were mindful also that it was desirable to structure the accrual, and if appropriate the payment, of benefits so as to avoid creating an incentive to retire early for those otherwise free to stay on.

·

Switchboard 071-270 3000

Fax 071-270 5653

Telex 9413704