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that in
As regards (a)(ii), whilst there is evidence the private sector some employees are given such an option, any similar arrangement for the public service would be much more difficult to defend. It would mean a radical departure from existing policy and would be seen as reflecting a total lack of confidence in the Hong Kong dollar.
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Even if such an option was
an option was feasible, it would still be necessary to fix a rate, either based on an average over a period of years (maybe 10-15 years) or perhaps for a period prior to appointment. If the latter were adopted many overseas pensioners, appointed when the rate was fixed at £1: HK$ 16, would not qualify for assistance.
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Neither option (a) (i) nor option (a)(ii) appears worth pursuing therefore.
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to
As regards (b), as indicated at paragraph 10 above, HMG may
introduce sterling safeguards in due course. In the meantime, it is extremely unlikely that HMG could be persuaded
consider special measures to help overcome
to help overcome a problem which is seen as arising from Hong Kong's monetary policy.
From a recent letter Lord Glenarthur addressed to the President of the Overseas Service Pensioners' Association, it is also clear that HMG believes that, taken over time (for example, from April 1981 to April 1988), the sterling value of Hong Kong pensions still compares favourably with those paid to equivalent public sector employees in the UK. It is unlikely to be productive to pursue this option.
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As regards (c), technically a non-statutory allowance might provide a viable solution. Payment could be triggered when the average exchange rate within say, any 3-month period fell below a specified rate. The allowance would restore the value of pension to what it would have been had the exchange rate been at the specified level.
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Having regard to the trends illustrated
illustrated in Annex A, it would not appear unreasonable to set the level at £1: HK$14 and its equivalent in other currencies. Although this is a purely arbitrary assessment it would prevent the value of pensions from depreciating by more than 25% as compared to the average exchange rate in the past 10 years. The trigger point could also be reviewed periodically.
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If such an arrangement had been in force on 1 April 1988, a UK domiciled pensioner in receipt of a monthly pension of HK$5,600 (the average pension paid) would have received a total supplement of $469 in respect of the period from 1 April to 31 December 1988. A detailed calculation is at Annex C.
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