options.1.HMOCS
MVS
CONFIDENTIAL
I. OPTIONS FOR HMG-FUNDED ARRANGEMENTS
STERLING SAFEGUARDS FOR PENSIONS
OPTION A: FIXED TRIGGER
HMG to underwrite pensions at fixed exchange rate, ie HMG would pay supplements if the Hong Kong dollar fell below a specified exchange rate. Possible exchange-rates are:
(a) HK $13.76 : £1 (likely HMOCS proposal: the 1991
average-exchange-rate)
(FCO/ODA proposal: the "historic" rate)
(b)
HK $16: £1
(c)
HK $22 £1
:
(more reflective of pay and pension
differentials)
(d) HK $30 : £1
POTENTIAL COST: see graphs and table attached.
Advantages:
(a)
(b)
(c)
(d)
(e)
Simple to administer
No cost to HMG unless HK$ falls below safeguard level Depending on chosen level of support, unlikely to result in pressure for pre-1997 introduction
Provides guarantee at pre-determined levels
Similar principle to existing safeguard arrangements for other colonial servants
Disadvantages:
(a)
(b)
흐흐
(c)
Provides no benefit for the majority of existing
pensioners (but their position would be eased by proposed amendments to the SPOS Regulations)
Depending on chosen level of support, could fall short of HMOCS members' expectations
Depending on chosen level of support, may be opposed by some serving officers as not taking account of
differentials between well paid grades (Admin. Officers, Judges) and not so well paid (Police).
CONFIDENTIAL
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