1 November 1990
Mr F M Watson Crosswinds
24 Budworth Road
Oxton
Birkenhead
Merseyside L43 9TW
Thank you for your letter of 5 October about the position of Hong Kong pensioners.
At the middle ranking and the more senior levels, which is where HMOCS members tend to serve, Hong Kong salaries have for many years been higher than those in the UK civil service. As a result, their pensions will reflect this. Moreover, they pay less tax and enjoy various other expatriate benefits. In general, they will be able to build up more savings than UK civil servants.
On SPOS, perhaps I should set out the original purpose of SPOS. SPOS seeks to top up the local pension increases paid to former colonial civil servants to the equivalent index-linked pensions increases paid to the British public sector. It does not aim fully toprotect the value of the basic pensions in sterling terms. I appreciate that the position for retired Hong Kong HMOCS members is different from most other retired HMOCS members in that the pensions of the former are not linked to sterling. But, as you may know, various arrangements for determining SPOS were tried before the current arrangements came into effect in 1976. We believe these are still the most practicable. I note what you say on SPOS. These matters are kept under review but I have to say that there are no plans to change them present arrangements.
EELAJE
rw
AR Paul
Hong Kong Department