TNAG-2686-FCO40-3888-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 22

CONFIDENTIAL

(3) Amendment to the

Supplementary Pension for

Overseas Service (SPOS)

Regulations (cost £1-2M pa)

(3) No amendment to the SPOS

Regulations.

In addition the Treasury are proposing a different mechanism for the pension safeguard scheme which would reduce further the

benefit of the safeguard to officers.

7. If the Prime Minister agrees to convene a meeting, the pressure will be on to split the difference. I consider that

there is scope for a reasonable compromise to be reached if the

the Secretary of State and the Governor agree that we

accept some concessions. A possible compromise might be:-

Compensation Scheme

To agree that officers who retire in 1997 should receive

compensation based on full factors, whereas officers continuing beyond 1997 would receive half factors. This would be opposed

by the HMOCS Association, but would have to be justified on the

grounds that officers who chose to serve beyond 1997 had less need for compensation for loss of career prospects. It would reduce the cost of the scheme by about £4 million (over 6

years).

Pension Safequard

To continue to reject the Treasury's principled position of basing the safeguard on comparability with UK civil servants,

but to agree to move from 16:1 to, say, 19:1. To accept, but only as part of an overall deal, the Treasury's proposed

mechanism.

sub.hmocs.ADMIN

JEB

CONFIDENTIAL