TNAG-1848-FCO40-2623-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1989 — Page 73

XCC(89) 22

Page

4

13

In this

University

Members may recall that Hong Kong currency fluctuation

operate

a

cont ext ,

to used (HKU)

for its Staff Terminal Benefits Scheme. protection arrangement

that they were these arrangement s Government's objections to

could

(a)

(b)

on

a lack of confidence in the Hong Kong suggest dollar and lead unnecessarily to pressure its exchange value; and

demands

from the similar generate service and other subvent ed organisations.

civil

HKU should be

Having considered the position outlined in memorandum XCC (86)9

28 Janaury 1986, the Council advised that requested to review and modify its Scheme.

on

14

In February 1987, following a review of the Scheme's New st ructure and management, HKU revoked the arrangements.

introduced whereby any supplementary payment s regulations were introduced would be based on an actuary's valuation of future liabilities and investment performance.

Options

15

Against this background, possible options which would the value of their assist overseas pensioners by protecting the

have been considered. pensions against currency fluctuations These options include -

(a)

(b)

(c)

granting overseas officers/pensioners an option

(i) to commute a higher percentage

pensions; or

of of their

(ii) for pensions to be paid in a currency of

their choice;

with

the

British

Government int roduction of a UK funded scheme, and

pursuing

introducing

allowance.

an

ex-gratia pension

the

supplement

16

>

for the

civil

The

The 50%

the New Pension Scheme As regards (a)(i)

on 1 1 July 1987 provides for a civil service introduced servant to commute up to 50% of his pension as a lump sum. Old Pension Scheme provides for a commutation of 25%.

was fixed following very careful examination commutation limit of the budgetary considerations and the Government's objective a continuing pensionable public of preserving the concept of service. If arrangements had been made for 100% commutation,

short in the

term this would have been extremely costly

to servant s could have been seen as encouraging civil thus undermining confidence in the future SAR Government.

and leave,