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overseas officers. But it remained the case that the country of origin was the country of recruitment. mistake had been the decision to include Hong Kong in the Supplementary Overseas Pension Scheme (SPOs). SPOS had originally been introduced as a safeguard in case post-colonial governments reneged on their commitment to HMOCS members. But he could not see why the Hong Kong Government's pension responsibilities should be borne by the British taxpayer. It was quite different in the case of newly-independent grant-aided colonies. SPOS had given the Hong Kong Government the excuse to argue that since HMG had taken on SPOS liability for Hong Kong, sterling safeguards should also be their responsibility. This position was particuarly invidious in view of the fact that no Hong Kong pensioner who had retired since 1976 had ever received SPOS because of the clawback arrangement.
6. Sir Philip Haddon-Cave also said that the value of the Hong Kong dollar had been artificially weakened because of the link with the US dollar since 1983. It was only expatriate civil servants who retired to the UK who suffered from the link with the US dollar. The cost of the US dollar link was reflected in salaries but not in pensions. Civil service salary increases took account of salary increases in the private sector where firms were compensating their senior employees for their sterling exposure, such as mortgage payments.
7.
Mr Haye said that pension increases were based only on the rate of inflation reflected in the Consumer Price Index A, whereas pension increases for HMOCS members, who were mainly senior civil servants, should be based on the Hang Seng CPI. He thought that ExCo would be sympathetic to a proposal to have a sterling safeguard for HMOCS members but the Hong Kong Government was unwilling to put it forward.
8.
Mr Haye added that, regardless of what the Joint Declaration said, many civil servants, including local
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