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FOI EXEMPTION NO...27 (1)
XCX(93)54
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The SPOS is payable by HMG (ODA) to HMOCS pensioners and is designed to ensure that these officers receive pension increases in line with UK inflation after retirement. For some time the SPOS arrangements have not worked fairly in respect of Hong Kong HMOCS pensioners. If exchange rate gains occurred on the basic pension when converted into £ Sterling, then the amount of SPOS payable would be reduced accordingly. However there was no make up for exchange rate losses. The SPOS revision now agreed by HMG will result in SPOS "working both ways" and to this extent subsequent annual pension increases after retirement will now be safeguarded.
THE CHINA DIMENSION
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We now intend to let the Chinese know the present position in general terms so as to avoid any surprise reaction. This will be done by UKREP JLG. We shall explain briefly what HMG now proposes to do, stressing that this is entirely consistent with HMG's obligations to HMOCS worldwide and that the package will be funded entirely by HMG.
LIKELY GENERAL CIVIL SERVICE REACTION
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There will be no public announcement by HMG or the HKG. The HMOCS Association will be informed shortly by HMG and a further round of consultations between them and HMG is expected in
Executive Council
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