OVERSEAS SERVICE PENSIONERS' ASSOCIATION
S.P.O.S. and H.K. PENSIONS
December, 1988
INTRODUCTION
The arrangements for the calculation and payment of Supple- mentary Pensions for Overseas Service (SPOS) for HK overseas pen- sioners are exceedingly complex and as there have been a number of evolutionary changes a number of misconceptions have arisen. At times officials writing on behalf of the ODA or the Crown Agents have not been fully explicit and so generalising on what may have been written has led to misunderstandings. (Hopefully this memo- randum states the situation correctly, but we do not claim infall- ibility in understanding all the facets in this complicated situation).
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The award and payment of pensions and local (i.e. HK) pension increases is governed by HK pensions legislation and this provided, inter alia, for a number of options as to the channel of payment (by the HKG or by the Crown Agents) and as to the sterling exchange rate which should be used for all or part of the pension and/or local pension increases. As the calculation of SPOS is based on the sterling value of an overseas pension, and as the payment of SPOS is reduced by the amount of any local pension increases, the variety of options and since 1972 a floating and at times rapidly fluctuating exchange rate have produced this complex situation. This memorandum seeks to describe the situation as affecting the majority of HK overseas pensioners who are paid their pensions by the HKG in HK$ (and then remitted as required to, say, the UK) or by the Crown Agents at the current monthly rate of exchange; and while describing the basic principles some marginal complications have been omitted in order to ease an understanding of the situation.
STATISTICS
Sterling/HK$ Exchange Rate
Pre-1967 Devaluation
Post-1967 Devaluation
On 30/6/72
On 30/6/73
On 30/6/74 On 30/6/75 On 30/6/76
=
£1
16.00
EA
14.5455
Bo
Annual Index Increase
With effect from
%
1/12/72
9.9
1/12/73
9.3
14.5455
1/12/74
16.5
13.1371
1/12/75
26.1
12.1455
1/12/76
13.8
10.755
Cumulative
100.8
8.8137
1/12/77
17.7
On 30/6/77
8.03
1/12/78
7.4
On 30/6/78
8.65
12/11/79
16.0
On 30/6/79
11.04
24/11/80
16.5
On 30/6/80
11.47
23/11/81
9.06
On 10/7/81
10.64
22/11/82
11.0
On 13/7/82
10.35
21/11/83
3.7
On 11/7/83
11.00
26/11/84
5.1
On 7/84
10.30
25/11/85
7.0
On 7/85
9.90
28/7/86
1.1
On
3/7/86
11.85
6/4/87
2.1
On
7/87
12.75
11/4/88
4.2
On 30/6/88
13.30
10/4/89
5.9
Exchange rates fluctuate wildly on a daily basis; the above are only representative figures; the lowest rate was about $7.5 in November 1976, and it was $8.45 in April 1985.
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Private notes are available after approval.