CONFIDENTIAL
serve until 30 June 1997 would be eligible for substantial payments, phased over several years. The inducement would therefore be to stay at least until 30 June 1997, rather than for a long period thereafter. This would be more in line with past practice, and Ministers might judge it more defensible politically than our present proposal (under which, for example, a 44-year old RHKP Chief Inspector who felt unable to continue under Chinese sovereignty after 1997 would receive under £12,000 compensation and no pension until his normal retirement age of 60).
(b) Early Retirement: We are re-examining the possibilities. We have established that it would not require new legislation, or probably any other high-profile decisions, for Hong Kong to give these officers the option of retiring on or before 30 June 1997 with immediate payment of pension. The Governor remains opposed to this: he has said that he does not know whether EXCO would agree, and that for Joint Declaration and general Hong Kong reasons he would not wish to recommend this to them, but that it would probably be a matter for his successor. We are consulting Peking and UKRep JLG about the Chinese dimension to decisions in this regard, and in particular seeking more advice on the likely Chinese attitude to employment of expatriates in Hong Kong public service after 1997.
(c) Sterling Safeguards:
The ball is in the Treasury court, but it is now clearer than ever that to leave HMOCS pensions unprotected against a collapse in the Hong Kong dollar is not a tenable option. There will remain scope for argument about the safeguard trigger rate we are proposing 16 to 1 but I think this would be defensible, given the relatively high salaries and pensions of many Hong Kong HMOCS officers.
BE1AAA/3
CONFIDENTIAL
No comments yet.
Private notes are available after approval.