forecasts of anticipated
retirement
dates of all HMOCS and
potential HMOCS members (including those likely to be affected by
the Limited Compensation and Special Branch Schemes), so that we can further refine our figures.
4. Alternative costings can be prepared using different
assumptions about exchange rates, by following the calculation method outlined in paragraph 2 above. For example an assumed current pensions bill of HK$ 160m a year, with a safeguarded rate
of HK$ 16 to £l and a prevailing rate of HK$ 20 to £1, would cost HMG around £2m a year. Using a projected pension bill of £244m for 2011 and the same exchange rates, the additional cost for that year
would be about £3m.
SPOS ADJUSTMENTS
5.
Any future estimates of the potential costs of rationalising the SPOS arrangements are subject to the same verification from
Hong Kong on numbers and pension values as are the sterling safeguard projections. As we have explained previously, the proposals affect officers in different ways, depending on factors such as their retirement dates, the relationship between the value of the basic pension originally awarded and the value of subsequent overseas increase awards, and their existing SPOS entitlement. It is therefore very difficult to make any accurate predictions of the
costs involved.
6. You will see from paragraph 6 and from Annex C of Nigel Cox's
of 29 letter August 1991 that calculations of potential SPOS adjustment costs are intricate and do not lend themselves readily to written explanation. In essence, we are proposing that any loss which the pensioner sustains as a result of his basic pension being paid at a less favourable exchange rate than the one extant at the date of his retirement, should be taken into account when assessing the level of increases to be topped up under the SPOS arrangements.
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