TNAG-2687-FCO40-3889-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 49

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 can 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