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2

You also for

protection

all

outside Hong Kong.

suggest a general

scheme of currency

pensioners who retire to countries Even if this were workable and fundable it would only lead to increased demands for

currency protection for all pensions. I must stress that pension safeguards are now an emotive issue with all staff.

As regards pension adjustments, we have concluded that CPI(A) remains the mcst appropriate indicator for determining pension increases against inflation. This is on the basis that over 90% of our pensioners fall within the expenditure bracket of CPI (A) or below. Our statistics show that only 2% come under the Hang Seng CPI.

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I am sorry that I am unable to give you a more encouraging reply. It remains our intention to seek ExCo's advice on the proposals to provide relief to pensioners in genuine hardship and to make pension increases a statutory right in April.

Meurs ever,

Durin

(David Ford) Chief Secetary

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