TNAG-2424-FCO40-3526-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 224

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21 May 1992

D Fish Esq

Head of Overseas Pensions Department ODA

(By Fax)

Dear Dave,

Foreign & Commonwealth

Office

London SW1A 2AH

Telephone: 071-

HONG KONG HMOCS

1. We have talked about ways of rejigging our benefits proposal to make it more defensible and more likely to achieve our objectives, without going above the ceiling figure which we gave to the Treasury. The Secretary of State's minute of 11 February stated that the maximum cost would be about £39 million.

2.

It would be very helpful if your Department could try to calculate the maximum costs under some or all permutations of the following possibilities:

(a) Calculation of individual total:

(i) use of Hong Kong Limited Compensation Scheme (LCS) supersession factors.

(ii) use of LCS full factors (ie as required to retire).

(b) Possible caps:

(i) £200,000 (cf Hong Kong LCS).

(ii) £120,000 (ie £12,000 uprated by RPI increase since 1963).

(iii) £12,000 uprated by UK public service wage inflation since 1963.

(c) Phasing:

(i) all officers eligible to receive 100% of total

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in a lump sum in 1997

in 5 annual instalments of 20% plus interest of 5% pa

- a first instalment of 20% and 5 annual instalments

of 16% plus interest of 5% pa

(ii) three possibilities as (i) above but with officers who serve until end-1999 to receive an extra 20% bonus then

(iii) officers who retire in 1997 eligible to receive 80% of total (lump sum or first instalment of 20% and 4 annual instalments of 15% plus interest of 5% pa), while

REGADU

SLM