At the moment, the PAPR RTC implementation (actually a paravirt firmware interface, rather than a normal device) works directly off host time, and so doesn't respect the options such as clock=vm which can be specified in the -rtc command line option.
This patch addresses this also making some other cleanups and small fixes to the PAPR RTC. I'm confident patches 1..4 are ready to apply, I'm little less sure about 5. I think it's an improvement over the current code, but it may still have problems in certain edge cases, and I've minimally tested it with migration.