DRAFT OF 5 May 1993
CONFIDENTIAL
HM OVERSEAS CIVIL SERVICE (HMOCS) HONG KONG: COMPENSATION AND PENSIONS SAFEGUARDING
1. There are some 700 HMOCS staff in Hong Kong. They include some [100] administrative and judicial staff, but most are senior police officers.
There are also some [1,500] existing pensioners.
The Foreign Office, the Treasury and the Governor of Hong Kong agree that arrangements need to be settled quickly for compensating these staff for loss of prospects and protection and safeguarding their pensions once Hong Kong transfers to China in 1997. This note summarises the outstanding issues on the package to be offered.
Background
2.
The FCO and Treasury agree that a balance is needed between offering terms which are accepted as fair by the staff concerned and avoiding unreasonable cost to the UK taxpayer. There is no dispute that a legitimate expectation of help at some level does exist.
3. The FCO consider that to be fair the terms must broadly reflect those applied in the 42 previous cases when the UK has withdrawn from a Dependent Territory. This means following as closely as possible the commitments given in White Papers of 1954 and 1960. Otherwise the morale and commitment of the staff could be damaged, causing many
many to leave and making it harder to maintain stability in the run up to transfer of sovereignty in 1997.
4. The Treasury argue that, in judging what is fair, it is reasonable to take account of the salary and pension entitlements of comparable UK staff. On average, taking salary and pensions together, Hong Kong staff are around twice as well off as their UK counterparts (the difference in salary costs alone is smaller). Within that, administrators are substantially better paid than police officers. The Treasury note that the White Papers explicitly excluded Hong Kong as being a special case.
5.
Two separate protection schemes, funded by the Hong Kong Government, have been set up for those directed to retire from especially sensitive positions, and for those passed over for promotion to make room for local staff. It is possible that the Hong Kong Government will introduce a general right of early
CONFIDENTIAL
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