7. We have arrived at our estimates by aggregating the basic
pensions bill for HMOCS officers by converting the individual
pensions to sterling at each officers retirement rate, and
comparing this figure with the total basic pensions bill converted
at HK$ 16 to £1. This gives a theoretical maximum liability of a little over £2m a year. However, certain limitations apply in the
case of;
i)
ii)
those recently retired officers whose current SPOS
entitlements are less than the losses they have incurred on their basic pension; and
those whose local
local Hong Kong increases already exceed their SPOS target figure.
After taking these limitations into account it is clear that the actual cost to HMG would fall to below £2m a year. At today's exchange rate of HK$ 13.75 to £1, we estimate the additional cost to be something in the region of £1.6m a year.
If it would be useful,
8. I hope these explanations are helpful. ODA officials would be happy to discuss the calculations with you either in the margins of our meeting on 12 November, or on a
separate occasion.
ANDREW BURNS
3
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