CONFIDENTIAL
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.
there
is
10. The sterling value of Hong Kong pensions i s
at risk now, SO
pressure fr om
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
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. if the Hong Kong dollar became worthless, the cost to HMG would be the sterling value of pensions and increases paid by Hong Kong, which is currently 10.5 million
per year.
enter into arrangements whereby Government accept this obligation.
or
Our aim should therefore be to
the Hong Kong (later the SAR) (It should be recognised that,
I f
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
it elsewhere, such pressure would be very difficult to resist. 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.) It is recommended that officials should study further how such a scheme might operate, and 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.
that we
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 Robert Carr, gave an assurance to Sir James Robertson, president of the Overseas Service Pensioners' Assocation (OSPA), that HMG
would not stand. as ide in the event of a default. This
was reaffirmed
as sur ance
in
CONFIDENTIAL