TNAG-2427-FCO40-3529-Hong-Kong-Her-Majesty-s-Overseas-Civil-Service-(HMOCS)-poli-1992 — Page 5

CODE 18-77

Mr Hawkes

Pensions Department

ORA

CONFIDENTIAL

16.11

Reference

HKA 233/5 &

SUBJECT REGISTRY

16 NOV 1932

1

E. K.

HONG KONG'S FUTURE PENSION LIABILITY

1.

We were grateful for your efforts in updating Hong Kong's future pension liability (your letter PD 512/80/03 of 10 September refers).

2.

One additional point which has occurred to us, and on which we should welcome your comments, is the question of conversion of pensions from local currency. I believe that in other Dependent Territories on independence, arrangements have been made so that conversion of pensions from local currency is at a rate of exchange agreed at independence in the Public Officers Agreement. Any collapse of local currency after indep- endence does not influence the pension paid in sterling.

3.

There are no plans, of course, for Hong Kong to go independent! We ought, however, to consider the hypothetical position if the Hong Kong dollar were to slide below an acceptable level. Career Civil Servants in Hong Kong, both local officers and HMOCS, would become concerned about the value of their future pension. Pensioners living outside Hong Kong (ex HMOCS and local) may also suffer from a diminishing income.

Is there any mechanism to alleviate this? (eg, SPOS).

12 November 1982

G C Livesey

Hong Kong and General Department WH 305

233 4475

CONFIDENTIAL