-
it places an artificially low cap of £120,000 on the compensation scheme. This would bite on a far higher
percentage of officers than in past schemes. But I think
this is justifiable in the present climate.
- the sterling pension safeguard rate of HK$16:£l will
protect only a proportion of officers' pensions.
7. My proposed compensation scheme would cost £2 million more
per year for 6 years than your proposal. The maximum
contingent liability arising from a pension safeguard set
nominally at 16:1 looks substantial. But it would only apply
if the Hong Kong dollar became worthless. In that apocalyptic situation, we would no doubt be having to help Hong Kong
pensioners anyway since the successor government would have
defaulted on pension payments. We have constructed our
safeguard proposal so that the Hong Kong dollar would in
practice have to fall well below 16:1 before HMG paid
anything. In my view, it would be a serious mistake for us to put forward a scheme which stands no chance of being accepted
as reasonable by the HMOCS officers or pensioners and from
which we would, as with the last proposal, be driven back.
8. In addition to the compensation scheme and sterling pension safeguard we also need to proceed with the modest
revision to the Supplementary Pension for Overseas Service (SPOS) Scheme proposed by ODA. The pension safeguard will not
work equitably, whatever the rate agreed, without a SPOS
revision. Existing Hong Kong HMOCS pensioners and the
Overseas Service Pensions' Association have been awaiting this