CONFIDENTIAL
7.
On worst-case assumptions ie if the Hong Kong dollar became
worthless, the cost to HMG would be the sterling value of HMOCS
pensions in any given year at the sterling safeguard level.
Pension payments will peak in 2011. If HMG had to pick up the
whole bill, the amount in 2011 would be £35 million at current
exchange rates: if an exchange rate of 16:1 were used, the amount
would be £29 million.
8. Finally it should be remembered that if the SAR Government
were to default on pension payments, HMG is committed to stepping
in on behalf of HMOCS officers. It is unrealistic to expect that HMG could assume responsibility for the payment of pensions whose value is not protected in some way.
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