CONFIDENTIAL
Supplementary Pension for Overseas Service (SPOS)
SPOS is an existing mechanism designed to supplement the sterling value of any locally awarded pension increases paid to former overseas civil servants to the same level as the increases paid on an equivalent UK public service pension. The present arrangements are inequitable because they penalise pensioners for exchange rate gains but take no account of exchange rate losses. The FCO/ODA have proposed an amendment to SPOS rectify this problem; this would cost about £1 million per annum.
THE HMOCS ASSOCIATION
The HMOCS Association have been informed that, in principle, the package of benefits will include a revised compensation scheme and a sterling pension safeguard. The Governor has also told them that HKG will permit them to retire in 1997 on full pension. Despite these assurances, the Association is getting increasingly frustrated that a detailed proposal has not been put to them for consultation. If there is no progrees soon the current moderate Chairman (Mr Cartland) may be forced to resign.
CURRENT POSITION
The Prime Minister asked the Cabinet Office to recommend a solution to this problem. The Cabinet Office prepared a paper summarising the main issues, but failed to recommend a solution. The Governor has made clear that he will not accept a package any less generous than the FCO proposal, that if one is imposed he will oppose it.
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CONFIDENTIAL
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