CONFIDENTIAL
Sterling Safeguard Options
3. It was agreed that:
(a) it was important to get a clear idea of the expected HMOCS numbers as soon as possible (ACTION: HKD to pursue).
(b) we should aim for introduction of any sterling safeguard on 1 July 1997, not before.
(c) additional calculations for the potential cost of sterling safeguards should be made on the assumption that all officers
commute 50% on retirement (the current calculations assume no commutation) (ACTION: GAD).
(d) we should discard the non-asterisked options, ie all options should be presented in 1992 UK prices (no re-calculation required: in practice we would safeguard
a notional pension derived from the 1992 pension
payable for the retirement rank point etc, converted into sterling at the average 1991 exchange-rate)
(e) Option C (trigger-rate of HK$24:£1) should be re-calculated at the rate of HK $22 to £1. (ACTION: GAD/ODA) (The Treasury believed that such a rate would eliminate the differential between public sector pay in Hong Kong and in the
They undertook to provide their working figures. (ACTION: HMT))
UK.
(f) Option E (use of exchange-rate at date of retirement) should be recast so that the trigger-point for HMG to intervene would be set 25%, 33% and 50% above the
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CONFIDENTIAL
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