TNAG-2685-FCO40-3886-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 133

cst.ps/dr/4mp13.1

(c)

to accommodate the existing SPOS protection, HMG only step in with safeguard payments when the amount the pensioner actually receives

from both the HK

would

falls

7.

(d)

(e)

Government and ODA under the SPOS Regulations below the guarantee level set by (a) and (b);

the safeguard could be introduced from a current date to complement the protection already afforded by SPOS;

the guarantee level would be indexed from 1992 in line with the UK RPI.

This would ensure that:

HK HMOCS officers would receive benefits at least comparable to those of their UK counterparts;

in fact, most will continue to receive pensions which are substantially higher than their UK counterparts; for example, those who retired 25 years ago have over 90 per cent of their total income in the form of pensions increases underwritten by SPOS; such people are already almost fully safeguarded by the UK, at a conversion rate more generous than the HK$13.76: £1 which the HK HMOCS

Association want;

by operating the scheme from a current date all serving and retired HK HMOCS will be afforded an immediate and reasonable measure of protection.

Compensation

8. You cite the 1954 and 1960 White Papers in support of an improved compensation scheme for HK HMOCS. However the 1960 White Paper, in setting out the general principles under which HMG would compensate HMOCS in territories undergoing a change of status, specifically excludes Hong Kong from these arrangements in recognition of its unique position. One aspect of this uniqueness already discussed is that Hong Kong is relatively wealthy and the HMOCS there are better paid than those who worked in other former dependent territories. We should also bear in mind the Joint Declaration which allows HK HMOCS to stay on beyond the handover without any diminution in their pay and conditions. HK HMOCS may also benefit from early retirement arrangements if the HKG chooses to introduce them.

9. I therefore see no good reason to improve upon the generous offer of compensation we have already tabled in Hong Kong. However, in view of your and Chris's main objective which is to induce a cadre of HK HMOCS officers to stay up to 1997 rather than beyond -- I can accept a revised scheme under which HK HMOCS officers would be eligible for full compensation by serving up to 1997 only. This would be option D in the FCO options paper.

10. This will almost certainly involve HMG in higher compensation costs. I therefore regard as necessary your proposal that a cap of £120,000 be placed on each officer's total entitlement to compensation.

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