TNAG-2689-FCO40-3891-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 16

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CONFIDENTIAL

TREASURY

SECRETARY TO THE)

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This RFD Treasury Chambers. Parliament Street SWIP 3AG

071-270 5000

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The Rt Hon Douglas Hurd CBE MP

Secretary of State for Foreign & Commonwealth Affairs

Foreign & Commonwealth Office King Charles Street

London

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Minister

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15 November 1993

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HONG KONG HMOCS: PENSIONS AND COMPENSATION

would now like to

confirm

Following exchanges last week, I agreement on the package of benefits for Hong Kong HMOCS officers.

2. This agreement is as follows:

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a maximum

cost.

A compensation scheme costing a maximum of £39 million at current prices. I realise officials will need to work out the precise details of the scheme but I should stress that I see £39 million as Accordingly, I expect the scheme to operate along the lines agreed by officials: this is based on a of some .20%.in the actuarial factors on which payments are based.

-✰

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reduction

A sterling pensions safeguard set at a level of HK$21:£1 and to operate on the basis of the Treasury mechanism as set out in paragraph 6 of my letter to you of 15 January this year; the maximum estimated contingent liability under this arrangement would be £154 million. This safeguard covers all contingencies which would reduce HMOCS pension payments to a level where the safeguard would be triggered, including a decline in dollar, or any default on pension payments by the

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