CONFIDENTIAL
(c) in practice we would ask HKG to allow all officers who
before 1 January 1996 apply to retire to do so at a time to
be decided by HKG between the date of their application and
30 June 1997; and that they should then enjoy immediate
payment of pension.
7.
Local civil servants' morale remains a worry, and anything further we do for HMOCS will increase the problem.
However, the Governor has not replied to Mr Burns' telegram
encouraging him to take a more sympathetic look at starting
on partial funding of pension. He told Mr Cox (HKD) and
Mr Fish (ODA) that he did not want them to discuss this with
his officials. In recent meetings with the Minister, the
Secretary for the Civil Service and Chief Secretary have
loyally stuck to the Governor's line that partial funding is too difficult (adducing the irrelevant arguement that a scheme based on rolloing over one year's pensions entitlements would be too modest to achieve anything worthwhile). Mr Galsworthy's warning that in some circumstances the Chinese might renege on the JD pensions commitment provides an additional reason for our urging HKG to take a more constructive approach about starting to build
up a pensions fund under the control of independent
trustees. The Chinese favour something on these lines and
it would help remove a part of the likely fiscal reserves
surplus from future contention (one could build in
safeguards so that HKG need not pay funds into the scheme
in a year significant fiscal downturn). We shall otherwise
be perpetually haunted by the Financial Secretary's HK $71
bn predicition. The Minister, Mr Patten and officials might discuss all this with Sir David Ford and Mr MacLeod during
their visits here later this month.
Rechett
PF Ricketts
NC1ACQ/5
CONFIDENTIAL
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