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Appendix II
Proposed Revised Pension Arrangements for Retired HMOCS Officers
The purpose of this proposal is to provide the pensioner with protection against fluctuations in the exchange rate and to maintain the value of pensions in line with those of the U.K. Home Civil Service.
It is proposed that from an implementation date (say 1.4.92) HMG would assume responsibility for the payment of pensions to those retired Hong Kong HMOCS members who wish to join the scheme and in respect of those officers the Hong Kong pensions would paid to HMG.
Hong Kong Government pensions would continue to be calculated according to the existing legislation and for those in the scheme the Hong Kong dollar value of the pension would be transferred to HMG at the current exchange rate. HMG would convert this amount to sterling at an agreed fixed exchange rate and the first monthly transfer would be the pensioners GUARANTEED INITIAL STERLING VALUE. The pensioner would receive this from HMG.
One There are various ways to establish a fixed exchange rate. method would be to take the average exchange rate over the period from when the sterling link was broken in early 1972 until the date prior to the implementation of this proposal, i.e. 31.4.92.
Subsequent annual adjustments would be based on those applied to U.K. Home Civil Service pensions and the pension would, as in the Home Civil Service, have an index linked sterling value. Hong Kong Goverment would continue to tranfer amounts equivalent to the officer's Hong Kong rension plus any adjustments.
The
The agreed fixed exchange rate would be uniform, it would apply to all pensioners who opt to be in the scheme, present and future and would remain in force continuously. The Hong Kong dollar value of pensions as at 1.4.92 would be converted at the agreed exchange rate and subsequent adjustments could be effected from 1.4.93 or on the date that U.K. pensions are adjusted. There would be no retrospective adjustment and no payment of arrears for any period prior to the date of implementation.
This scheme would ensure stability for individual pensioners while HMG, which might gain or lose with the exchange fluctuations, should not be exposed to excessive expenditure. HMG would fulfil its responsibility to care for its Overseas Civil Service and would be in a much better position than powerless pensioners to negotiate with the Hong Kong SAR government if the terms of the Joint Declaration are not adherred to. The Hong Kong administration would not have to bear any additional cost. There are benefits for all.
TOTAL P.08
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