COSTS
OF
STERLING
SAFEGUARD
Treasury fopood
(Emullas)
FCO proposal
Dadrit
Net
excluding
Add
Goss
level
cos't
SPOS
Crest
IVF Bases
SPOS
cost
HK$
Rayment
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Estacast of FCO proposal (7)-12) ou (5)-(4)
(8)
26
200
94
106
150
94
244
44
22
236
414
142
177
वद
271
35
16
324
914
230
244
94
338
14
13.76
377
0.4
283
283
94
377
23-07-1993 17:53
FROMM
GOVERNMENT ACTUARY'S DEPT
TO
0712703387
P.02
Notes:
i:
ii.
SPCS costs for existing pensioners if HK$ worthless are now assessed as £94m (not £80m).
The average SPOS protection for existing pensioners is broadly equivalent to a trigger level of HK$13.76. iii: SPOS costs for active erployees are difficult to isolate
from other costs, without developing a stochastic model for future changes in HK & UK irflation and exchange rates.
iv:
V:
As an example of fiii), if the HK$ becomes worthless in 1997, the basic persion entitlement of active employees retiring after 1997 is worthless, and SPOS is nil! Incorporating SPCS for actives would increase the extra costs of the FCO proposal shown in column (8).
TOTAL
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