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and other pecularities in the indexing, pensioners were
receiving pension increases far in excess of what was
intended.
8. In 1977, therefore, after negotiations with the
Overseas Service Pensioners Association, the arrangement was
changed. Those retiring on or before 30 June 1976 had
the basic pension calculated on the basis of the
exchange rate on this date. Those retiring after this date would have their basic pension calculated on the
basis of the exchange rate on the day of their
retirement. In practice this has meant that those
retiring on or before 30 June 1976 when the exchange rate was roughly HK$8 to £1 receive a higher level of
SPOS than those who retire after this date.
9. Hong Kong HMOCS pensioners have long pointed out the deficiencies of the SPOS system as it applies to those who
retired after 30 June 1976. It is arbitrary, since whether or not pensioners benefit from it depends in large measure on the prevailing rate of exchange between the Hong Kong
dollar and sterling on the day of their retirement. The
higher the then sterling value of their pension, the more likely they are to benefit from SPOS. Secondly, it is seen
as inadequate because it does not address the central problem of exchange rate fluctuations: it is solely
concerned with pension increases and not the basic value of the pension. Mr Blye and Mr Watson both ask for something
to be done to protect the sterling value of their pensions.
Way Forward
10. In the present circumstances, there are the following possible options:
i) despite the obvious injustice, we could continue to treat the matter as a low priority, taking the
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