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taking into account number of years served
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divide the resulting figure by 16 to provide the sterling pension base
increase the pension base in line with UK RPI
- whenever the officer's Hong Kong pension (including any subsequent increases paid by HKG/SARG) expressed in sterling falls below this level, HMG will pay a safeguard addition.
5. Although such a scheme would ensure that an HMOCS officer's pension will always be better than that of his UK counterpart, by virtue of salary differentials and pension earning rates, the HMOCS Association will no doubt point out that, even at a rate of 16:1, an officer could still experience a very substantial fall in the sterling value of his pension. They will no doubt point out that in previous cases the full value of officers' pensions were protected whereas this scheme will, in reality, only benefit them if there is a very significant fall in the value of the Hong Kong dollar or if the SARG refuses to pay HMOCS pensions.
6.
That said, you will notice that the principles underlying the scheme set out in the Chief Secretary's attached letter of 15 January (para 6(c) refers) differ fundamentally from the proposals outlined in para 4 above.
in para 4 above. Apart from advocating a safeguard of 26:1, the Treasury are insisting that any index linked supplement (SPOS) which is paid by HMG under the UK Pensions Increase Legislation be taken into account before the safeguard is triggered. But SPOS is not intended to make good any shortfall in the value of the basic pension as originally awarded: it is simply designed to provide the pensioner with some protection against inflation, by ensuring that any subsequent increases awarded by an overseas government are brought up to the same level as the increases paid to a hypothetical Home Civil Service counterpart who is deemed to receive a basic pension of equivalent value. Thus, if the SPOS entitlement is used to supplement any shortfall in the sterling value of the basic pension, it would require an even more dramatic fall in the value of the Hong Kong dollar before the safeguard came into operation.
7.
Either safeguard scheme would probably be more acceptable to the HMOCS Association if the Treasury agree to the proposed amendment to the SPOS Regulations. The present position on this amendment is that it has been put it aside pending a decision on the safeguard arrangements. We suspect that when we start
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