estimate (£94 million) of the present value of SPOS to existing pensioners if the HK$ became worthless.
The extra costs of the FCO proposal at the top of the table arise because a safeguard at HK$26 on basic pension plus separate SPOS protection is a stronger protection than a safeguard at HK$26 on total pension. The HMT proposal is likely to be cheaper under less extreme scenarios than a worthless HK$ for similar reasons, but this has not been examined in detail.
Finally, the table shows gross and net costs for both proposals. They differ only in the assumed costs of SPOS to existing pensioners (£94 million) if the HK$ becomes worthless.
I hope that this is clear. Please ring me if I can explain anything.
Yours sincerely,
ootinghams
DJ Hughes
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