FM HONG KONG
TO DESKBY 18090OZ FCO
TELNO 1612
OF 18050OZ MAY 90
12745 MDHIAN 106
FOR STONE HKD FROM SHIPLEY CSB
MPS LETTER:
MATTERS OF CONCERN TO AECS
TO SAY THAT HONG KONG PENSIONERS CONTINUE TO DO REASONABLY WELL IN COMPARISON WITH THEIR UK COUNTERPARTS IS ONLY TRUE IN RESPECT OF OFFICERS RETIRED IN THE LAST TEN YEARS OR SO. IN THE CASE OF PENSIONERS WHO RETIRED IN THE LATE SEVENTIES WHEN THE EXCHANGE RATE WAS ABOUT HKD 8 TO POUNDS STR 1, THERE HAS BEEN A SIGNIFICANT REDUCTION IN THE STERLING VALUE OF THEIR BASIC PENSIONS, AND EVEN WITH HONG KONG PENSION INCREASES AND SPOS, THEY HAVE NOT DONE AS WELL AS THEIR UK OR OTHER HOMCS COUNTERPARTS. THE FACT REMAINS THAT, UNLIKE UK PENSIONERS, HONG KONG HOMCS PENSIONERS DO NOT HAVE THE PURCHASING POWER OF THEIR PENSIONS PRESERVED IN STERLING TERMS. WE SUGGEST YOU EITHER QUALIFY YOUR STATEMENT IN YOUR REPLY OR LEAVE IT OUT ALTOGETHER. AS IT IS LIKELY TO LEAD TO ANOTHER ROUND OF ARGUMENTS WITH AECS AND OSPA WHEN THE LATTER GETS TO KNOW ABOUT THE REPLY.
2. WE ALSO SUGGEST THAT IN RESPONSE TO AECS' FIRST POINT, PARAGRAPH 3 OF YOUR DRAFT REPLY SHOULD MENTION THE PROVISIONS IN THE JD AND BL FOR THE CONTINUED PAYMENT OF PENSIONS AFTER 1997 ON TERMS NO LESS FAVOURABLE THAN BEFORE.
WILSON
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