CONFIDENTIAL
make some allowance for the fact that Hong Kong salaries are
higher than in the UK, and is willing to accept our proposal
of a safeguard level of 16:1. This rate represents a 35%
discount on current exchange rates.
The HMOCS Association will argue very strongly for a pension safeguard at HK$13.76: £1. Although their final position is likely to depend upon the acceptability of the overall package including compensation and general right to retirement, they will stress that the HK$13.76 rate can be justified as an average in 1991, that there is no basis for penalising HMOCS officers who have served in Hong Kong by setting an artificially adverse rate and that the level of salaries
should not be the issue. But the Governer and I conclude that
16:1 would be a reasonable compromise as part of the right
It does not betion that we co. mipare a more Truscably
package.
Compensation astro
Chisi Purm
adverse rate.
You [expressed doubts about the policy objective we were
[expressed_doubts]
Swen
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seeking to achieve with our revised compensation proposal, particularly when set along side, a right to retire for HMOCS officers on transfer of sovereignty. Our initial proposal was designed to provide a measure of compensation and incentive to officers to encourage them to work in Hong Kong both up to and for some years after 1997. However, in the first round of consultations, the HMOCS Association rejected this approach. They argued strongly that it was not in line with previous schemes, and that it would in effect force officers to
continue serving under Chinese sovereignty to earn compensation to which they were entitled. The Association have said they will not accept anything less than a scheme on
traditional lines.
CONFIDENTIAL
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