CONFIDENTIAL
1997. As regards the proposed cap, in previous schemes this
affected few officers; in the case of Hong Kong, we estimate
that some 75% of officers remaining in 1997 would be affected.
Early Retirement
7.
The right to retire before normal retirement date with
full payment of pension was a feature of all HMOCS
compensation packages elsewhere. In previous cases, it was in
the gift of HMG, but in the case of Hong Kong it is a decision
to be taken by the Hong Kong Government. The HMOCS
Association has asked that officers be granted this right.
8. The Governor needs to retain these officers for as long as
possible while avoiding a mass exodus in the last few months
of British sovereignty. He has also to consider the effect of
such arrangements on local officers in Hong Kong and to ensure
that he does not leave himself open to Chinese criticisms that
he is taking actions which would disrupt a smooth transition
in 1997. However, given the pressures from HMOCS officers in
Hong Kong and the inclusion of a right to retire in all
previous schemes, he is prepared to consider an arrangement
which would allow officers to apply for early retirement as
part of a package which he considers to be equitable. We are
sending to your officials a copy of a paper prepared by the
Hong Kong Government on early retirement which sets out how
this could be achieved.
9. If HKG offers HMOCS officers a general right to
retirement, it would reduce by about 30% HMG's contingent
liability for safeguarding pensions, given that those officers
who chose to retire would be eligible for smaller pensions and
would receive the commutable element before the safeguard came
into effect. However, the right to retire early would have no
CONFIDENTIAL
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