CONFIDENTIAL
in sterling value as a result of exchange rate movements no
allowance is made for this in calculating SPOS. Pensioners and the HMOCS Association argue that the current arrangements are not equitable.
4. The ODA have proposed a modification to the SPOS Regulations which would enable SPOS payments to increase (but not above the maximum SPOS entitlement-ie the increase in UK
civil servants' pensions) to reflect any devaluation in the sterling value of the basic pension. This would provide pensioners with some limited protection against downward
exchange rate movements.
5. The Governor believes that amendment to the SPOS
Regulations, which could cost up to £1-2M per annum, is
essential if the HMOCS package is to be acceptable to the HMOCS
Association.
6.
The Treasury's position is that once a sterling safeguard
is in place pensioners will have protection at a level
equivalent to or better than their UK counterparts, and that to amend the operation of SPOS as we propose would provide an additional level of safeguard which they consider unjustified.
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