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Aden are still outstanding). Much of the difficulty stemmed from problems of relationships with, or within a post-inde-
pendence Government and its public service department, as they seemed unwilling to negotiate the formal agreements involved and/or to provide the requisite pensions details. Experience showed that in cases where independence was after 1973, all these difficulties could be minimised by effecting the take-over prior to independence.
Supplementary Pension for Overseas Service (SPOS)
5. In the late 1960s the British Government recognised its special obligations to overseas pensioners, both those of former Colonies and those of territories which were or still are Colonies,
to supplement their pensions out of British funds on the same basis as all British public service pensions are index-linked. This was enshrined in the Pensions (Increase) Act 1971 and the regulations made thereunder. There was, or has been, no problem in calculating year by year the amount of the SPOS when the basic pension was already payable at a fixed sterling rate either by a former Colony prior to take-over of its overseas pensions, or after take-over by the British Government. Complications, however, arose where, as in Hong Kong, pensions are still payable in local currency, which has a floating sterling rate of exchange. By 1976 an anomalous situation had arisen and in 1977, following consultations with the OSPA, the British Government decided that for the purpose of calculating the SPOS, the sterling value of existing Hong Kong pensions including the SPOS payable as at 30th June 1976 should be taken as the base pension on which
future SPOS calculations would be based. For officers retiring after that date, the sterling exchange rate as at the effective date of their last day of service should be taken to calculate the value of their base pension. This was based on the philosophy behind the index-linking of pensions that the supplements should maintain the value of the pension granted at the time of retirement. However, as explained in Appendix B, the use of the exchange rate on the last day of service produces a lottery as to the value of the base pension, and can thus produce considerable variation in the amount of the SPOS payable.
6.
It should be emphasised that the regulations governing the payment of the SPCS are made by the British Government and the
The Government of a payments thereunder come from British funds.