CONFIDENTIAL
B
rate of increase in his pension, his actual base pension may well have decreased significantly in sterling terms because
of an unfavourable movement of the Hong Kong dollar/pound
exchange rate. Two examples are shown at the Annex. Hong Kong pensioners are therefore anxious that the British Government provides a safety-net through the SPOS
Regulations against any further devaluation of their pension in sterling terms.
We are
10. This problem over SPOS can really only be resolved if Hong Kong pensions are payed at fixed exchange rate. not in a position yet to do anything about this, although as mentioned above, the question is under consideration.
Therefore again in replying we should not go further than we
have in the past on the SPOS arrangements for Hong Kong.
Rodine Hand
R M Marsden
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ROFANE/4
CONFIDENTIAL
14/12