FNMP/RJH/F18
24th October, 1989
A. Paul, Esq.,
Head of Hong Kong Department,
Foreign & Commonwealth Office,
London,
SW1A 2AH.
Dear Mr. Paul,
When we met on Friday, 23rd June, 1989, you promised to refer my deputation's representations on this subject to the Hong Kong Government, and this is to ask if you have had any reaction from Hong Kong.
I had hoped for a record of our discussion, as promised, but as this has not materialised perhaps you would be good enough to confirm my understanding of what we agreed, so that my colleagues and I can decide on the next best step.
We concurred that the payment of Hong Kong pensions and the protection of their value, both in the short term and in the long, was the responsibility of the Hong Kong Government, but that in the event of any failure by the Hong Kong Special Administrative Region to honour this commitment after 1997, Her Majesty's Government would have an inescapable obligation to members of HMOCS to ensure continued payment and protection of their pensions.
Recent events in China and Hong Kong have underlined the anxieties of Hong Kong pensioners in this country, and, while they are very conscious of the priorities of both Her Majesty's Govern- ment and the Hong Kong Government in salvaging the Joint Agreement on the future of Hong Kong, they and serving officers would appreciate any personal assurances that can be given about their pensions.
Our immediate concern is with the unusual vulnerability of Hong Kong pensions paid in sterling because of the link between the currencies of Hong Kong, and the United States of America, and because depreciation of the value of pensions in this context is not covered. You confirmed that Her Majesty's Government is not prepared to guarantee Hong Kong pensions against the US dollar exchange rate risk, holding that this is properly the responsibility of the Hong Kong Government; and the Hong Kong Government, without making any serious attempt to justify its stand, has made it per- fectly clear that deficiencies of Hong Kong pensions against
sterling arising from the link system should be made good by
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