Increase act.
CONFIDENTIAL
If
7. On worst-case assumptions ie if the Hong Kong dollar became worthless, the cost to HMG would be the sterling value of HMOCS pensions in any given year at the sterling safeguard level. Pension payments will peak in 2011. HMG had to pick up the whole bill, the amount in 2011 would be £35 million at current exchange rates: if an exchange rate of 16:1 were used, the amount would be £29 million.
8.
Finally it should be remembered that if the SAR Government were to default on pension payments or if HMOCS officers were to find themselves in financial difficulties, HMG is already committed to stepping in on behalf of HMOCS officers. These assurances are contained in the so called
Carr-Robertson assurance of 1964. At that time Mr Carr
stated that the British Government would ensure the payment of pensions in the event of a default and also stated that if a pensioner found himself in financial difficulties the British Government would feel obliged to take appropriate
remedial action.
The existence of these assurances needs to
be borne in mind when considering what may at first appear
to be the substantial possible implications of a sterling
safeguard.
PICABC/3
CONFIDENTIAL
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