D
XCC(89) 22
24
Page
average
Similar arrangement s could be adopted
adopted for Overseas pensioners domiciled elsewhere, for example,
elsewhere, for example, if the value of the Hong Kong dollar fell below 25% of the 10 year exchange rate for the currencies shown in Annex D. basis, the trigger point would be
On this
E
Australian dollar
7.39
Canadian dollar
6.51
Indian Rupee
0.80
New Zealand dollar
5.81
Pakistan Rupee
0.64
not have
which, with the exception of Canadian dollar, would warranted the payment of any supplement s up to 31 December 1988. A Canada domiciled pensioner in receipt of a monthly pension of $5,000 (the average pension paid) would be eligible for a supplement of $13 up to that date (Annex E).
Financial Implications
25
>
The additional cost of granting a pension supplement in the manner described in paragraphs 21
21 to 24 above would depend on the relative strength of the Hong Kong dollar. Some 2,300 overseas pensioners reside
reside outside Hong Kong, and the annual cost of their pensions is about $140 million. The 1,500 UK pensioners draw annual pensions totalling $99 million; the 100 Canada pensioners draw about $6 million. For the UK pensioners, every ten cents depreciation of the HK dollar against sterling below the level of £1: HK$ 14 would cost about $710,000 per annum. If the exchange rate reached £1: HK$16.
the additional annual cost would be about HK$14.2 million. For the Canada pensioners, every ten cents depreciation of the HK dollar below the trigger point would cost about $90,000 per
annum.
Drawbacks
26
Pensions are paid as of right under the pensions legislation. If an ex-gratia compensation scheme were introduced administratively, it would not
would not be possible to set a trigger point at say $10: £1 (and its equivalents) below which the supplement could be clawed back. Although such an arrangement would be desirable, for it to be introduced would require the provisions of the pensions ordinances to be amended. Other difficulties, that is the legal position, consultation with the Chinese authorities repercussions also need to be assessed.
and
possible