options.1.KMOCS
MVS
CONFIDENTIAL
I. OPTIONS FOR HMG-FUNDED ARRANGEMENTS
STERLING SAFEGUARDS FOR PENSIONS
OPTION A: FIXED TRIGGER
HMG to underwrite pensions at fixed exchange rate, ie HMG would pay supplements if the Hong Kong dollar fell below a specified exchange rate. Possible exchange-rates are:
(a) HK $13.76 £1 (likely HMOCS proposal: the 1991
average-exchange-rate)
(b) HK $16: £1
(FCO/ODA proposal: the "historic" rate)
(c) HK $22 : £1
흐흐흐
(d) HK $30 :
£1
(reflecting pay differentials)
(reflecting pay and pension
differentials)
POTENTIAL COST: see graph A and table attached.
Advantages:
(a) Simple to administer
(b)
(c)
(a)
(e)
(f)
Expenditure wholly contigent
Depending on chosen level of support, unlikely to result in pressure for pre-1997 introduction
Provides definite guarantee at pre-determined levels Similar principle to existing safeguard arrangements for other colonial servants
Welcome to some serving officers as providing the same safeguard level to all (but see disadvantage (c) below)
Disadvantages:
(a)
(b)
(c)
Provides no benefit for the majority of existing pensioners (but their position would be eased by proposed amendments to the SPOS Regulations)
Depending on chosen level of support, could fall short of HMOCS members' expectations
Depending on chosen level of support, may be opposed by some serving officers as not taking account of differentials between well paid grades (Admin. Officers, Judges) and not so well paid (Police). To overcome this problem, it would be possible to set different safeguard levels for different grades.
CONFIDENTIAL
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