COMPENSATION
HONG KONG HMOCS ARRANGEMENTS
Previous practice
Compensation, calculated with actuarial factors, payable to all HMOCS officers serving at time of independence. Usually paid in six equal instalments (to avoid incentive to immediate departure), with interest at 5% (to encourage officers to stay on). "Cap" of £12,000 (present equivalent about £120,000).
(Exchange rate: fixed rate as at time of independence.)
HMOCS claim
Compensation, calculated with traditional actuarial factors, payable to all HMOCS officers serving on 30 June 1996, to be paid in lump sum on or before 30 June 1997. (Exchange rate to be as for sterling safeguard: "neutral".)
HMG's proposal
"Benefits", calculated at half traditional actuarial factors, to be payable to HMOCS officers serving on 30 June 1997: 20% of this notional total payable as of right, plus annual instalments of 10% to those who stay in SARG service. No cap (very few would be caught by £120,000). (Sums to be calculated according to 1991/92
salary of post held in 1997, converted to sterling at 1991 average exchange rate, up-rated in line with subsequent UK retail price inflation.)
State of play
The Treasury had agreed in principle (albeit not very specifically) to our proposal, which we had costed at probably £20-£30m, with a maximum (if all eligible contract officers came into HMOCS) of £39m.
We have been looking at different options, closer to
traditional practice.
These would involve dropping the
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