ANNEX D(2)
STERLING SAFEGUARDS
Traditional Arrangements funded by HMG
This scheme is the same as that in Annex C(1), except that HMG would fund the arrangements and not the SARG.
In most previous colonies - the three exceptions are the Bahamas, Bermuda and Brunei - HMG has in practice funded the arrangements. This was usually done by including in the aid package an element to cover the early payment of pension (and compensatîn). Subsequently HMG stepped in because of the failure of the territories to meet pension payments or because of the collapse of the currencies involved.
In the Bahamas, Bermuda and Brunei, the territories agreed to meet the early payment of pensions and their currencies appreciated against sterling so that HMG did not need to step in on that score.
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