CONFIDENTIAL
Fxtract FROM
SIR G HOWIE'
MINUTE
2/0
A
7 MARCH 1985
SHOULD ARRANGEMENTS BE INTRODUCED TO SAFEGUARD THE STERLING VALUE OF PENSIONS EARNED FROM HMOCS SERVICE UP TO 1997?
9.
The standard
arrangement
enables the pension to be freely
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 .
-
is at Hong Kong pensions
risk now, SO
associations pensioners'
to introduce
a
10. The
of sterling value
there is
from pressure sterling safeguard immediately. The pressure will intensify as 1997
approaches if HMG makes по move to take over the pensions concerned. Given that this is part of
of the standard package for HMOCS it is not
to argue that such a
is safeguard
On worst case assumptions, i.e.
the Hong Kong
the cost to HMG would be the sterling
increases
paid by Hong Kong, which is
per year. Our aim should therefore be to
arrangements whereby
open
to HMG
unjustified.
dollar became worthless,
value of pensions and currently £10.5 million
enter
into
the
,
i f
unnecessary or
the SAR)
it
it
so
for
(later Hong Kong Government accept this obligation. (It should be recognised that,
if we
on HMG to failed to achieve this aim, there would be pressure
meet this obligation, and in the last resort since HMG has me t elsewhere, such pressure would be very difficult to resist. I f did become necessary for HMG to meet the obligation, it could do by manipulating the pension supplement payable from UK funds, which HMOCS pensioners are already eligible. Nevertheless such
should be strongly resisted.) pressure officials should study further how such a scheme might operate, and should start discussions with the Hong Kong government about
In the meantime the public
the public line should
line should be that we are aware of
precedents, and that our aim will be to see comparable arrangements made for HMOCS officers in Hong Kong.
that we
it.
the
I t
is
recommended
that
CONFIDENTIAL