TNAG-2429-FCO40-3531-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 53

CONFIDENTIAL

and to the UK taxpayer.

Early Retirement

12. The 1960 White Paper states that at the time of constitutional

change HMOCS officers should be allowed to retire. The practice

has always been to allow retirement with immediate payment of earned pension. Hong Kong HMOCS officers naturally want this right, although some may decide to stay on and work for the Special Administrative Region Government.

13.

Early retirement with full payment of pension is a matter for

the Hong Kong Government, not HMG. We are discussing the matter

with them. If it could be agreed it would make the overall package

substantially more attractive to HMOCS officers. It would also reduce by up to 30% the contingent liability involved in any HMG funded sterling safeguard.

14. In short, I invite the Committee to agree that:

- We should make revised proposals to the HMOCS Association as soon

as possible;

-

These should be based on traditional arrangements, of a kind we

can justify as meeting honourably our obligations;

The package should comprise a compensation scheme on traditional lines with a cap, as proposed in paragraph 9 above; and an HMG-funded sterling safeguard scheme on the lines proposed in

paragraph 11 above;

-

We should continue to explore with the Hong Kong Government the

option of an early retirement scheme;

- The arrangements for HMOCS will require separate PES provision

(when the time comes) from 1997 onwards.

D.H.

Foreign and Commonwealth Office

cab.maj.ADM

SLM

CONFIDENTIAL