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3.
However the Government did not immediately tie up the details and announce the scheme as originally envisaged. The advice from Hong Kong was that it would be much better
to be able to announce a simultaneous solution to the
questions of sterling safeguards and:
(c) SPOS: adjustment to the operation of the Supplementary Pension for Overseas Service regulations, in order
better to fulfil the intention of the UK Pensions (Increase) Act of 1971 and provide more equitable treatment for present
Hong Kong pensioners suffering serious exchange-rate
losses.
4.
After much discussion among Departments and with the
Hong Kong Government, my officials put forward last August their detailed proposals for tackling this package of
issues. Your officials had reservations about these
proposals. Subsequent exchanges have narrowed the
differences, and I understand that the enclosed discussion
paper is now broadly agreed among Departments. However we
of uncertainty about are still some way from decisions, mainly because (the feasibility of one possible option for sterling safeguards
(option (d): the concept of pre-1997 commercial loans
against post-1997 pension entitlements) remains unclear: a
Hong Kong Government consultant is due to report on this general concept in about a month, and it will no doubt then
take more time to see whether a specific scheme can be devised which satisfactorily meets HMOCS officers'
concerns.
5.
Meanwhile however pressure has built up rapidly in Hong Kong, where many HMOCS officers are no longer prepared
to rely on our often repeated assurances that these matters
are under active consideration. They have recently
organised themselves into an association: at present its leadership is moderate and responsible and they kept a firm
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