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FM HONG KONG
TO IMMEDIATE FCO
TELNO 1139
OF 24124OZ APRIL 92
INFO PRIORITY PEKING, UKREP JLG HONG KONG
264-
127532
MDHIAN 1508
FROM GOVERNOR
2714
PERSONAL FOR RICKETTS, HKD.
-257
YOUR TELNO 682: HMOCS: PENSIONS.
SUMMARY
I WOULD WELCOME A GENERAL DISCUSSION OF HMOCS ISSUES NEXT WEEK. WE NEED TO MOVE FORWARD AS QUICKLY AS POSSIBLE NOW THE IMPORTANT TACTICAL MOVES HAVE BEEN MADE. STERLING AND LOCAL PENSION SAFEGUARDS ARE GOING TO BE THE KEY ISSUES. SPOS ALSO
NEEDS TACKLING.
DETAIL
2.
IT WOULD BE EXTREMELY HELPFUL IF THE STERLING SAFEGUARDS ISSUE COULD BE RESOLVED BEFORE THE NEW PENSION SCHEME OPTION DEADLINE OF 30 JUNE. WE HAVE REPORTED IN TELNO 1125 THE OUTCOME OF THE HMOCS ASSOCIATION GENERAL MEETING. IT IS CLEAR THAT STERLING SAFEGUARDS IS AN ISSUE OF MAJOR CONCERN TO ALL HMOCS OFFICERS AND IF NOT RESOLVED SOON IT MAY INFLAME FEELINGS TO THE POINT WHERE IT IS NO LONGER POSSIBLE TO DEAL WITH THE SUBJECT OF HMOCS ARRANGEMENTS IN A LOW KEY MANNER.
3.
ON THE QUESTION OF LOCAL PENSION SAFEGUARDS. WE HAVE NOW CONCLUDED THAT THE MARGOLIS PROPOSAL IS A NON-STARTER, THE STANDARD CHARTERED BANK AND THE HONG KONG BANK HAVE NO INTEREST IN IT AND WE HAVE NOT FOUND ANY FINANCIAL INSTITUTION THAT IS WILLING TO PAY MONEY NOW IN EXCHANGE FOR PENSION RECEIVABLES OVER A PERIOD OF TEN YEARS OR MORE, OR TO OFFER AN EXCHANGE RATE HEDGING MECHANISM TO CIVIL SERVANTS ON SPECIAL GROUP TERMS.
4.
MONETARY AFFAIRS AND FINANCE BRANCH EXPERTS HAVE STUDIED THE MARGOLIS REPORT AND HAVE CONCLUDED THAT IT CANNOT BE PURSUED. THEY STICK BY THEIR ORIGINAL COMMENTS PASSED TO COX (HKD) DURING HIS VISIT. INDEED MARGOLIS HIMSELF HAS NOW CONCLUDED THAT HIS ORIGINAL IDEA OF A SCHEME FUNDED BY DEBT SECURITIES, BACKED BY
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