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remitted overseas
at the rate against sterling in force at independence. The burdens thus imposed on the successor governments in effect to pay sterling pensions have been largely removed by the pensions take-over programmes.
or
10. The sterling value of Hong Kong pensions
at risk now, SO
there is pressure
from pensioners' associations to introduce a
sterling safeguard immediately. The pressure will intensify as 1997 approaches if HMG makes no move to take over the pensions concerned. Given that this is part of the standard package for HMOCS it is not
open to HMG to argue that such a safeguard is unnecessary unjustified. On worst case assumptions, i.e. i f the Hong Kong dollar became worthless, the cost to HMG would
be the sterling
value of pensions and
paid by Hong Kong, which is currently 10.5 million
Our aim should therefore be to
the Hong Kong (later the SAR)
(It should be recognised that,
enter into arrangements
increases
per year.
whereby
Government accept this
this obligation.
it
if we failed to achieve this aim, there would be pressure on HMG to
meet this obligation, and in the last resort, since HMG has me t
elsewhere, such pressure would be very difficult to resist. If it
did become necessary for HMG to meet the obligation, it could do SO by manipulating the pension supplement payable from UK funds, for
which HMOCS pensioners are already eligible. Nevertheless such
pressure should be strongly resisted.)
I t is recommended that officials should study further how such a scheme might operate, and that we should start discussions with the Hong Kong government about it. In the meantime the public line should be that we are aware of
the precedents, and that our aim will be to see comparable arrangements made for HMOCS officers in Hong Kong.
SHOULD MINISTERS BE READY TO REAFFIRM THE EARLIER UNDERTAKING TO THE
EFFECT THAT HMG WOULD PAY LOAN ADVANCES IN LIEU OF PENSIONS TO HMOCS
IN THE EVENT OF A PENSIONS DEFAULT BY THE SAR GOVERNMENT AFTER 1997?
11.
In 1964, in response to anxieties about the security of pensions payable to overseas officers by independent government, the Secretary for Technical Cooperation, the then Mr
then Mr Robert Carr, gave an assurance to Sir James Robertson, president of the Overseas
Service Pensioners' Assocation (OSPA),
aside in the event of a default. This
that HMG
assurance
would not stand
was reaffirmed in
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