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HMOCS: STEKLING PENSIUN SAFEGUARD SCHEME
Purpose of the Scheme
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The purpose of
of the proposed sterling safeguard scheme is to provide HMOCS pensioners with protection against a serious decline in the sterling value of their pension due to movements in the exchange rate between the Hong Kong dollar and Sterling.
Principal Features of the Scheme
A fundamental concern for HMG in devising a proposed sterling pension safeguard scheme has been the need to assess accurately the maximum contingent liability under the scheme and control as far as possible any increase in this liability.
HMG has therefore decided that it would not be appropriate for the scheme to apply to a pensioner's actual pension since HMG does not know what their pension level will be at their date of retirement or the amount of pension increases which will be awarded by the HKG/SARG thereafter. Instead, HMG proposes that that the safeguarded "notional" pension should be calculated with reference to January 1992 нк salary levels uprated in line with UK RPI.
"Should apply to a
A second fundamental feature of this scheme is the exchange rate to be applied to determine the sterling value of the "notional" pension which HMC will protect. HMC propose that the cachango rate should be HK$21:E1.
The scheme will come into operation on or before 30 June 1997.
How an officer can calculate the level at which his pension will he protected.
An officer must first establish his "notional" pension. To do so he determines the pension to which he would have been entitled had he retired in January 1992 but based on his actual length of service and substantive rank at the date of his actual retirement. The resulting figure in Hong Kong Dollars is then divided by. 21. to. obtain the sterling value of the protected "notional" pension. This figure is then uprated in line with increases in UK RPI to find the value of the "notional" pension at the time of the officer's actual retirement. If the officer is 55 or over at that time UK RPI will continue to be applied to the "notional" pension otherwise it will remain frozen at that level until he reaches 55.
If the sterling value of the pensioner's total pension (ie his basic pension, local pension increases and UK pension supplement) at any time falls below this figure HMG will make up the difference.
200d 928 ON
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90:ST £6/11/62