CONFIDENTIAL
FM FCO
TO IMMEDIATE HONG KONG
TELNO 1592
OF 091736Z NOVEMBER 92
CONFIDENTIAL
HKA 233/1
PERSONAL FOR GOVERNOR FROM RI KETTS, HKD
HMOCS
T Q DIST?
602
034111
MDHOAN 3959
377
1. WE ARE FAXING TO YOU THE FINAL VERSION OF THE HMOCS OPTIONS PAPER, TOGETHER WITH OUR COMMENTARY AND A DRAFT MINUTE WHICH WE HAVE PREPARED FOR THE SECRETARY OF STATE TO SEND TO MR PORTILLO
IN ADVANCE OF THEIR MEETING ON 13 NOVEMBER.
2.
DESPITE HONG KONG BANK POURING COLD WATER ON THE PRIVATE SECTOR PENSION SAFEGUARD OPTION, THE TREASURY ARE STILL PURSUING IT. THEY HAVE OBTAINED ADVICE FROM THE BANK OF ENGLAND THAT SUCH A SCHEME MIGHT BE WORKABLE AND MERITS FURTHER EXAMINATION (WE ARE FAXING THE BANK OF ENGLAND'S LETTER TO WATERS (CSB). WE WANT TO ENSURE THE TREASURY CANNOT USE THIS AS AN EXCUSE FOR FURTHER DELAY. WE HAVE THEREFORE ASKED CSB TO GO BACK TO HONG KONG BANK REQUESTING A FIRM VIEW ON WHETHER THE BANK WOULD BE PREPARED TO OFFER A SCHEME OF THIS SORT AND, IF SO, THE COSTS INVOLVED. WILL NEED THIS INFORMATION WELL IN ADVANCE OF THE SECRETARY OF STATE/ PORTILLO MEETING.
3. THE TREASURY ARE KEEN TO PRESS YOU TO OFFER A GENERAL RIGHT
TO RETIRE AS THIS WOULD REDUCE THE POTENTIAL COSTS TO HMG OF ANY
STERLING SAFEGUARD. WE HAVE POINTED OUT TO THEM THE DIFFICULTIES INVOLVED (YOUR TELNO 1563). HOWEVER, WE NOTE FROM THE MINUTE OF YOUR RECENT MEETING WITH THE CHAIRMAN OF THE HMOCS ASSOCIATION THAT YOU MAY NOW BE CONTEMPLATING AN ARRANGEMENT WHICH WOULD ALLOW OFFICERS TO RETIRE WITH PENSION. IT WOULD BE USEFUL TO KNOW HOW YOUR THINKING IS DEVELOPING ON THIS BEFORE THE MEETING: AND WHAT YOU WOULD AGREE THE SECRETARY OF STATE SHOULD SAY TO MR PORTILLO ABOUT IT.
4.
WE EXPECT MR FORTILLO WILL ASK WHETHER THERE IS LIKELY TO BE
A FURTHER EXTENSIN TO THE DEADLINE FOR OPTING OR THE NEW PENSION SCHEME, AND ALSO WHETHER HKG HAS REACHED ANY DECISION ON PENSION SAFEGUARDS FOR ITS CIVIL SERVANTS. IT WOULD ALSO BE VERY
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CONFIDENTIAL
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