TNAG-2689-FCO40-3891-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1993 — Page 49

CONFIDENTIAL

FCS/93/204

CHIEF SECRETARY

НКА. 233/,

19 NOV 1993

12183

PS/Mr Goodlad

PS! Lady Chalke:

iSI Pus Six TCELES

Ver Hum

jw

mi

HKD

782

1

Aur Freema

{

ODA

hits Brooks, Legal Adm}

HONG KONG HMOCS: PENSIONS AND COMPENSATION jur Tatter, CD

Thank you for your letter of 8 November.

RED

X59.x1

1.

2.

I agree

You

I have discussed this twice with the Governor. that we should try to split the differences between us. propose that we should set the exchange rate for the pension safeguard at HK$21: £1. This represents the exchange rate mid-point between our respective proposals, but it does not split equally the difference in maximum contingent liability. Using your proposed mechanism, we calculate that an exchange rate of HK$20: £l would be a fair splitting of the difference. This would present a maximum contingent liability of £166 million, compared with £106 million under your proposal and £230 million under mine.

3. This represents a significant concession on the Governor's part. In the Governor's and my view, any package will only be acceptable to the HMOCS Association if it includes my proposed At present exchange rates, amendment to the SPOS Regulations.

the amendment would cost only about £700,000 per annum, rising to about £2 million if the exchange rate fell to HK$16:£1.

I propose that we should now agree on a package comprising:

4.

CONFIDENTIAL