CONFIDENTIAL
between the Governor and both the Chief Secretary and Mr Wiggham about some HMOCS issues. The advice we have received from Hong Kong on these has not proved wholly reliable. It now seems possible that we should concentrate on inducing officers to stay until 1997 rather than for long periods thereafter.
Civil Service Matters
5.
Despite the guarantee of pensions in the Joint Declaration, all civil servants in Hong Kong are worried about the security of their pensions, which are paid out of recurrent revenue there is no pension fund. HKG have been looking at a number of ideas eg partial funding, a (contributory) provident fund scheme, private sector schemes perhaps including political risk insurance. The Chinese have backed a staff association proposal that HK $15 billion should be set-aside from the fiscal reserves as a support fund. We have suggested ways in which this idea could be developed before and after 1997 to build up a significant pensions fund, which would provide significant reassurance in the civil service. Mr Wiggham strongly favours something on these lines, but the Financial Secretary and Governor have hitherto opposed any such initiative (and been reluctant to discuss ideas with London). The question may not be resolved until after Mr Patten's arrival.
5. HKG have recently awarded junior police officers a 10% pay rise.
This reflects rising public concern about violent crime and recognises recruitment difficulties the police have suffered since Tiananmen. Predictably the other disciplined services have complained, but the award has been generally well-received.
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