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the Hong Kong Dollar were to collapse, HMG would have no alternative but to offer a sterling safeguard. This is one of the issues which we will need to discuss at the meeting you are chairing with the ODA and the Treasury on 22 August. But as this is a subject which we have barely addressed in detail and with which Ministers are quite unfamiliar, we can obviously make no commitments at this stage.
General Compensation Scheme
8.
OSPA have been pressing us to hurry up and announce the D details of the General Compensation Scheme which they
presume will be instituted in 1997. We have told OSPA that we are working urgently on this and hope to make an
announcement soon. It would not be appropriate to go
further at the meeting. Our proposals for the General Compensation Scheme will fall far short of OSPA's expectations and we can expect strong and vigorous correspondence from them and from sympathetic MPS
scheme is announced.
when our
Supplementary Pension for Overseas Service (SPOS)
9.
In addition to their basic pension which is paid by the Hong Kong Government, retired Hong Kong HMOCS members also receive a supplementary pension paid by HMG. SPOS does not guarantee the sterling value of the basic pension but ensures that the annual pension increases granted after retirement will be no less than the pension increases awarded here to UK public sector pensioners ie it extends
the benefits of index-linked pensions to overseas
pensioners. OSPA's concern is that for SPOS purposes, the sterling value of the basic Hong Kong pension is determined by using the exchange rate prevailing at the time of
retirement and is therefore something of a lottery. They
argue that there should be a fixed rate of exchange for
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