TNAG-2688-FCO40-3890-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 51

195.

ি

Note: Discined with Mr

Richelts and Dr Mamis

Mr N C G Whitney

Hong Kong Department/FCO

HONG KONG AND HMOCS

1.

Ла

1

2246

233/1

Reference

From: D S FISH

(Ext 3444 - AH501)

Date: 23 June 1993

NT.

We spoke about Mr Ricketts' submission of 22 June, and the draft telegram to the Governor.

2. I am concerned that the telegram paints an over optimistic picture of the likelihood of agreement being reached at official level. It is certainly true that our recent meeting with the Treasury was more constructive than usual in that Mike Richardson did seem prepared to compromise on compensation and the sterling safeguard. We are still looking into the Western Pacific compensation arrangements which were unique and complex. But if we are to use lower factors then we must have actuarial endorsement for what we propose; reducing the factors to fit within a predetermined budget is a non-starter.

3. However, in my view, the main obstacle to progress will be the SPOS Regulations. The draft telegram suggests that the Treasury are likely to agree to Our SPOS amendment if we compromise on compensation and the safeguard. You made the point that this was only an

only an 'opinion'; nevertheless, Civil Service Branch in Hong Kong are well aware of what the SPOS amendment means and are likely to read a great deal into our optimistic view. In practical terms, for officers in receipt of Hong Kong pension increases, the SPOS amendment will have the effect of protecting their pensions at their personal retirement date exchange rates. It is not a basic pension protection scheme, which is why the Treasury were persuaded to accept it in the first place. But as they came to terms with the mechanics of SPOS they began to realise that it drives a coach and horses through their overall strategy to make UK and Hong Kong benefits more comparable. I would be surprised if anything other than the outcome of a Judicial Review would persuade the Treasury to agree to the SPOS amendment. You will recall that they even discussed with the Treasury Solicitor the withdrawal of the current SPOS protection for serving officers.

4.

I appreciate that it is too late to make an amendment to the telegram but I feel that I ought to record my view that we might be influencing the Governor to depart from his preferred course of action by painting too rosy a picture of the prospect of progress.

Squn

D S FISH

Overseas Pensions Department

23 June 1993

HKA 233/1

28 JU 1993

200d ZUS ON

PP:PI

£6/90/£2