Confidential
Supplementary Pension for Overseas Service (SPOS)
6.
SPOS is an existing mechanism designed to supplement the sterling value of any locally awarded pension increases paid to former overseas civil servants to the same level as the increases paid on an equivalent UK public service pension. The present arrangements are inequitable because they penalise pensioners for exchange rate gains but take no account of exchange rate losses. The FCO/ODA have proposed an amendment to SPOS to rectify this problem; this would cost about £1 million per annum. The Treasury are yet to be persuaded.
THE HMOCS ASSOCIATION
1.
The HMOCS Association have been informed that, in principle, the package of benefits will include a revised compensation scheme and a sterling pension safeguard. The Governor has also told them that the Hong Kong Government will permit them to retire in 1997 on full pension. Despite these assurances, the Association is getting increasingly frustrated that a detailed proposal has not been put to them for consultation. If there is no progress soon the current moderate Chairman (Mr Cartland) may be forced to resign.
CURRENT POSITION
8. The Governor is adamant that neither he nor the HMOCS Association will accept a pension safeguard rate of worse than HK$16:£1 and that amendment of the SPOS regulations is essential if the package is to be saleable in Hong Kong. further meeting between the Foreign Secretary and the Chief Secretary is likely to be held in mid-October:
if no agreement can be reached, OPD (K) may be invited to take a decision at its next meeting (probably in November).
A
bgrnd.chalkvis.ADMIN
JEB
Confidential
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