The Legal Position
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Whereas there is по provision in the pensions legislation which says that pensions may not be paid in a currency other than the Hong Kong dollar, and at a specified rate of exchange, the ordinances, inter-alia, provide for the payment of pensions based upon salary. Salaries are paid in Hong Kong dollars and there is no legislative ΟΙ contractual provision for payments to be made otherwise.
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ex-gratia
Legal advice confirms that although arrangements could be introduced, on balance, it is considered that the pensions legislation should
should be amended to authorise such a scheme. Without such
such authority, the proposed scheme is liable to be challenged in the courts.
Consultation with the Chinese Government
29
The question arises as to whether the Chinese side would need to be consulted on proposals to introduce ex-gratia arrangement s to adjust pensions. Such arrangement s would probably not have implications after 1997 if the
after 1997 if the arrangement s were revoked before then because the link with the US$ was abolished, or HMG introduced alternative safeguards for members of HMOCS. However, as abolition of the US$ link is contrary to Government's stated policy and there
there can be no certainty that any alternative safeguards will come int o introduction of ex-gratia arrangement s now implications which would carry beyond 1997. therefore, be prudent to approach the Chinese side
matter in advance.
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case.
If the arrangement s
place, the could have would,
It
on
the
were discussed with the Chinese side, it could be difficult
difficult for the British side to argue the In view of the possible repercussions in the civil service and the community (see paragraphs 31 to 33, 37 to 38 below), it would be difficult to convince the Chinese side that the arrangements would contribute to a smooth transition and have no adverse effects on the community.
Possible Repercussions Within the Civil Service
31
Terms and conditions of service for local and overseas officers are, with particular exceptions, broadly comparable. Previous represent at ions from both local and Overseas staff associations for fixed sterling exchange rates for Hong Kong pensions have been resisted. If this position is changed for overseas pensioners, it would be very difficult to preclude 2,000 local pensioners who have retired overseas from seeking similar treatment. They could argue that they are suffering the same degree
degree of hardship as overseas pensioners and their difficulty similarly stems
from the Government's monetary policy.
CONFIDENTIAL
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