TNAG-2688-FCO40-3890-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 104

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COM EPETY

16. NIGEL WHITNEY

HKOIFCO

NOTES: MEETING FCO 26 MAY 1993 AT 11.00 AM

STERLING COMPENSATION SCHEME: PRIMARY FEATURES

(a) the Scheme would come into operation on 30 June 1996;

(b) the "appointed day" would be either 30 June 1997 for those officers who stay on or a date between 30 June 1996 and 30 June 1997, is a personal date for those who wish to retire earlier with the approval of the Governor;

(c) the lump sum would be calculated on the appointed day

based on actual HK salaries as at 1 January 1992 or 1 January 1993 (based on the HK salary reviews effective from April 1991 or April 1992) converted at the average exchange rate for that year. In the case of April 1991 the average exchange rate would be 13.7609. The average for 1992 would be 13.6533. The resultant figure would be increased through RPI to the appointed day (as would the cap of £120,000 set at April 1991 levels);

Janusy (isit

(d) the figure found through (c) above would then be applied to a actuarially determined factor based on the officers age and length of service on the appointed day. Full factors would be used irrespective of whether the officer chose to retire or stay on;

(e) payment would be made over a period of four years in five instalments regardless of whether the officer opted to retire or stay on. 5% a year on reducing balances would be paid in

either case.

(f) for those who stay on both the HK salary used to determine the compensation on the appointed day and the CAP would be increased in line with RPI during the draw down period. This would reflect salary increases during that period. These officers would also get the benefit of any increases due to promotion. Special rules would apply to the calculation of interest in such cases;

(g) for those who stay on but are later forced out, reach their normal retirement age or die service the balance, if any, of compensation would be paid immediately together with the appropriate rate of interest. For those who resign they would continue to be paid their compensation in instalments together with the appropriate rate of interest;

(h) for those officers who are superseded for promotion the compensation would be calculated as described above except that the amount due on the appointed day would be a sterling sum less the amount already received by the officer under the HK Limited Scheme converted at the rate of exchange on the date of payment plus 5% a year per month interest to the appointed day.