TNAG-2430-FCO40-3532-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 7

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CONFIDENTIAL

will make a difference.

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Compensation is based on age salary

and length of service. Compensation increases for each year

of service until 10 years have been reached- and until the proposed cap, £120,000, on the compensation is reached. Since

there are now less than 5 years to July 1997 were we not to

count bought back service it would hit officers only now

transferring to pensionable status.

5.

Our Legal Consultant has advised that previous schemes in

other territories going to independence did not expressly exclude such service as counting, but that the arrangements

for changing from contract to pensionable terms, especially as regards the Judiciary, are undoubtedly far more generous in Hong Kong than elsewhere. Such transfers in other territories are likely to have been fewer and earlier. Although precedent

would point to allowing the buying back of service, we have been careful to present the scheme we are now promulgating as

unique and tailored to meet Hong Kong's circumstances. could, if we wish, exclude such service.

6. The case against permitting bought back service to count is primarily threefold:

We

(i) These officers cannot argue that they have suffered a loss of expectation of career as HMOCS officers: they now know

exactly where they stand;

(ii) All the officers (except some 25 prominent members of the

Judiciary) have had over 7 years to change to pensionable

terms: the fact they did not do so earlier suggests they were

waiting to see what would give them most gain;

(iii) It could add £3-4 million to the compensation bill

(although the actual sum is likely to be less than this as the

majority of officers switching from contract to pensionable service do not buy back service).

buy.back.ADM

SLM

CONFIDENTIAL

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