provides that public servants and members of the judiciary previously serving in Hong Kong may remain in employment with conditions of service no less favourable than before and that pension benefits for such persons retiring or completing their contracts after 1997 will be paid no less favourably than before 1 July 1997.
8. The Hong Kong Government refused to introduce a general compensation scheme or provide a right to retirement with immediate pension. In 1989 it was agreeed by the Treasury and the FCO that HMG should find a compensation scheme. Compensation under HMG's proposals for payment from UK funds is limited to one fifth payable in 1997 to receive the other four fifths, HMOCS members would have to continue in service in Hong Kong after 1997 and would receive the remaining payments in annual instalments of 10%. Payment of the remaining four-fifths would therefore be tied to completing eight more years' service in the HKSAR Government. There are Western Pacific precedents for this, but payment was made in fewer instalments. The tables on which compensation is. calculated are also said to be acturially unsound. HMG have made no provision for retirement with immediate, pensions. In the past HMG has paid half the compensation bill and now pays monthly pension bills. No arrangements have been made with the Chinese authorities to guarantee the value of pensions or for a UK guarantee. If the Hong Kong Government were to make arrangements for payment of pensions after 1997 or instalments of compensation, this would need the prior agreement of the Chinese authorities and if this needs to be enshrined in a law, it will need to be in a Hong Kong law surviving 1997, not an Order in Council. The Legislative Council is unlikely to be willing to pass such a law which would treat HMOCS expatriates in Hong Kong more favourably than other expatriate and locals in the Hong Kong Government. HMG have not consulted the Chinese on such issues or on sterling safeguards.
9.
The grounds for distinguishing Hong Kong HMOCS from other HMOCS members is unconvincing. These are that the Joint Declaration and Basic Law provide for continuing employment and there is no active policy of localisation; Hong Kong officers with 10 years service can retire with deferred pensions, unlike past HMOCs;
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