the paymaster); and despite the fact that the conventional country of recruitment of expatriate officers was, and still is, the U.K.
On retirement there, expatriate pensioners have sterling liabilities which now they have to meet with US dollar linked Hong Kong dollars and that involves for them an exchange risk which is historically unjustified and wholly unexpected.
The effect, in practical terms, is that the
standard of living of those expatriate pensioners who have retired whence they came is being eroded and, given the outlook for the US dollar, will go on being eroded for the foreseeable future, even though the Hong Kong Government's declared policy on the payment of pensions is to maintain their real value at the date of retirement intact
That is not entirely possible in the case of expatriate pensioners for an exchange risk will always be present (the theoretical offset being that that risk will not always be on the downside).
That is to
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10
Say!
there can be no argument with a Hong Kong dollar exposure. But there certainly can be with a US dollar exposure which, furthermore, is discriminatory: unlike local pensioners and locally resident expatriate pensioners, expatriate pensioners are not at the expected mercy of the Hong Kong economy, but subject to the unexpected vagaries of the US dollar; and those expatriate pensioners who have, of their own free will, retired in odd places, or whose country of origin is elsewhere, probably benefit from the US dollar link system. (albeit unintentionally). Finally, the present regime'is uniquely unfair on post 1976 expatriate retirees for they are, quite rightly, not afforded even that degree of protection so illegitimately enjoyed by pre 1976 expatriate retirees under the old SPOS rules flowing from the almost quixotic decision by Whitehall to include Hong Kong within OSAS way back in the 1960s.
7.
In the foregoing summary, I have not covered all the points in my various letters.to you, but it is longer than I intended anyway.
I hope it will help to concentrate your mind!
Sir David Ford, KBE, LVO, Chief Secretary's Office, Government Secretariat, Lower Albert Road, Hong Kong
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1.
(Philip Haddon-Cave)