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Mr Smith's letter and the attached briefing note touch
on a number of issues of concern to expatriate officers in
4.
Hong Kong.
However, the AECS raises in particular two
matters of primary concern: the guarantee of payment of pensions after 1997 and protection of the sterling value of
these pensions.
5.
On the former, Mr Smith acknowledges the assurances in
the Joint Declaration but warns that genuine concern remains - and that it is affecting morale. The issue of sterling
safeguards, is pursued in greater depth.
Mr Smith argues that the purpose of SPOS is to maintain the sterling value of overseas pensions but that it fails to do so because of
fluctuating exchange rates.
6.
As Lord Caithness will recall from earlier submissions,
this is not the purpose of SPOS, which is intended to ensure
that the annual pension increases granted after retirement
will be no less than the pension increases awarded to the UK
public sector.
7. There is nothing to add to statements already made on the issue of SPOS and sterling safeguards. As with previous letters of this kind, a short departmental reply would
suffice.
AR Panc
A R Paul
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