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From the Minister
OVERSEAS DEVELOPMENT ADMINISTRATION
ELAND HOUSE
STAG PLACE LONDON SWIE 5DH
Telephone 071-273 0409
The Rt Hon John Patten MP
House of Commons
LONDON
SW1A OAA
17 October 1990
PKB 431 14
RECEIVED IN
INDEX
1.4 NOV 1990
Dear John
Thank you for your letter of 27 September to Tony Newton about
Mr S W Rainbird of 57 Southmoor Road, Oxford, OX2 5RF. I am replying as the Minister responsibile for certain overseas pensions matters.
Mr Rainbird was employed by the Government of Hong Kong from 1956 to 1979 and his retirement benefits are calculated under the laws of that territory, and paid from local revenues in Hong Kong dollars. As a former member of Her Majesty's Overseas Civil Service (HMOCS), Mr Rainbird is also eligible to receive an index-linked pension supplement (SPOS), designed to top-up the value of any Hong Kong increases to the same level as the increases paid on an equivalent UK public service pension. SPOS is not intended to supplement any shortfall in the sterling value of the basic pension. This basic pension is the sole responsibility of the Government of Hong Kong, who as far as we are aware, have no plans to protect pensions against adverse exchange rate movements. However, the Hong Kong dollar is tied to the US dollar, and this does provide a measure of stability for externally paid pensioners.
Although in Mr Rainbird's case there has been a gradual decline in the sterling value of his basic pension, he has been awarded Hong Kong pension increases of 154% since retirement. An equivalent UK pensioner, while having his basic pension constant in sterling terms, has received increases to the value of 105%. Because the value of these overseas increases exceeds the equivalent UK increases, no SPOS is currently payable to Mr Rainbird. If, through a further deterioration of the exchange rate, the sterling value of the increases was to fall below the UK figure, then SPOS would make good the difference.
/Mr Rainbird is
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