ANTHONY THORNE
Chartered Accountant
(2)
The ODA Overseas Pensions Department has responded to this situation by telling me that my pension now is greater than that enjoyed by a UK public service pensioner who retired at the same time as I did on an equivalent sterling pension. What they failed to acknowledge, until I pointed it out, is that while my UK public service counterpart has enjoyed a pension increase of some 22% over the last five years to maintain the purchasing power of his pension, the sterling value of my pension has remained at virtually the same level, resulting in a reduction of 22% in real terms over the same period.
I challenged the ODA to take their argument to its logical conclusion, that if the Hong Kong dollar was to fall to the extent of reducing the sterling value of my pension by a further £800 a year to bring it on all fours with that of my UK counterpart, they would accept this situation with equanimity. The silence was deafening!
The ODA's line of argument seems to rest on the assumption that after I retired I enjoyed the benefit of a somewhat better exchange rate than I might have expected when I retired. I respond to this argument by pointing out that the exchange rate of $12.427 was simply the exchange rate on the date my retirement took effect, compared with an average exchange rate of $10.96 in the year before I retired and $10.90 in the year following retirement. While you may be advised that the losses in exchange rate values I have been suffering over the last five years or so only make up for the gains in exchange rate values I enjoyed in the first five years of retirement, I would argue that the exchange rate values I enjoyed during those five years were no more than I could reasonably have expected at the time my retirement was approved in 1980.
The actual sterling value of my Hong Kong pension over the last five years has been as follows.
Sterling pension
(per month)
Date
HK pension
Exchange rate
(per month)
31.3.86
$10836
$11.57
31.3.87
$11161
$12.61
31.3.88
$11495
$14.83
31.3.89
$12185
$13.15
31.3.90
$13282
$12.91
Present
$14610
$15.40
£ 936
£ 885
£ 775
£ 927
£1028
£ 948
Exactly the same pattern applies of course to Hong Kong civil servants who retired after March 1986, but who have had little opportunity so far of enjoying exchange rates better than those taken in calculating their basic pensions for SPOS purposes. The SPOS scheme has not provided any relief to them or me during a period which has seen the value of our basic pensions plus increases fall by up to a third. The reason for this is that the SPOS scheme addresses the question of overseas pension increases only and not the exchange value of the basic pension itself.
Cont'd...
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