[We shall similarly amend the draft Compensation Scheme ] .
4. We agree the definition (i) on page 4 should be (j).
5. We think "law of Hong Kong" should remain in paragraphs 9(1)(b), 9(3) and 10(1). We want to know what the position is in Hong Kong even if it involves an amendment which we do not recognise for certain purposes, particularly as it affects the actual pension income. In particular we do not want pensioners withholding information on the grounds that it was derived from an amendment which was not part of the relevant law as recognised by the Secretary of State.
6. Paragraph 2(2): This is a useful comment. If there is a later amendment to the relevant law which increases the basic pension in a way we do not recognise, we will count that increase as actual pension income just as we intend to count increases as provided in paragraph 4(2)(b). We think paragraph 2(2) as drafted does not apply to the actual pension income or gratuity, but the fact that Mrs Krun raises the point requires us to make our intentions abundantly clear. We will therefore add a new sub- paragraph (3) as follows:
10
(3) Nothing in sub-paragraph (2) applies to the determination of the actual pension income of a pensioner or the determination of an actual gratuity, and in relation to such determination, the definition of relevant law in sub-paragraph (1)(i) shall be read as if the words "up to the date on which this Scheme comes into operation, and any other law recognised by the Secretary of State" were omitted.".
7. Paragraph 6 "ceases" and "suspended": There is a point here, but we do not see it in quite the same way as Mrs Krun. We will pay a supplement if the actual pension income is less than the notional pension. If no pension is paid we will not make up the total difference between nothing and the notional pension and paragraph 6 goes some way in saying that. But Mrs Krun says, in effect, what happens if the pension ceases under a later law not recognised by the Secretary of State? As drafted, the paragraph does bite if the pension is suspended by such later law.
8. The logic of our position would require us to take the same position whether there was a total cessation or a suspension. Our approach would be to make no payments under this Scheme and to amend the paragraph by moving the words "or ceases" in paragraph 6(a) to after the "relevant law". This, of course, is not the end of the matter. Unless the pension were properly terminated or suspended under the relevant law (including a later, recognised, amendment), there would be a great deal of pressure on HMG to do something about it. In these circumstances and at least for the time being - HMOCS pensioners would rely on the undertakings given Carr/Robertson and subsequent statements for HMG to step in and pay the safeguarded pension should there be a default.
9. Paragraph 6 "recalculation": This is a good point. Although we have yet to give full consideration to how we would approach such a question we think we can probably add at the end of paragraph 6(b): "as the same proportion of the notional Hong Kong
2003 BPC ON
TTFT 26/21/22
No comments yet.
Private notes are available after approval.