Written question asked by Anthony Durant (Conservative), in the House of Commons. It was due for an answer on Monday, 14 October 1996. It was answered by Liam Fox (Conservative) on Monday, 14 October 1996 on behalf of the Foreign and Commonwealth Office.

Foreign and Commonwealth Office

Question: What figure would be used under Part II of the Schedule to the Hong Kong (Overseas Public Servants) (Pension Supplements) Order 1996 to calculate the notional pension if it were based on a median average rather than a mean average of comparable Hong Kong and United Kingdom civil service grades; what would be the maximum potential cost to the United Kingdom Government if the sterling pension safeguard scheme were based on that figure; and if he will review the scheme in the event that the value of the Hong Kong dollar falls significantly after 30th June 1997.

Answer: Sir Anthony Durant: To ask the Secretary of State for Foreign and Commonwealth Affairs what figure would be used under part II of the schedule to the Hong Kong (Overseas Public Servants) (Pension Supplements) Order 1996 to calculate the notional pension if it were based on a median average rather than a mean average of comparable Hong Kong and United Kingdom civil service grades; what would be the maximum potential cost to the United Kingdom Government if the sterling pension safeguard scheme were based on that figure; and if he will review the scheme in the event that the value of the Hong Kong dollar falls significantly after 30 June 1997. [39682] Dr. Fox: The notional pension under part II of the schedule to the Hong Kong (Overseas Public Servants) (Pension Supplements) Order 1996, based on the mean salary differentials between comparable grades in the Hong Kong and United Kingdom public service, is calculated at the rate of HK$21 to £1. If median as opposed to mean salary differentials were used this would not affect the rate. The hypothetical maximum liability to HMG would therefore remain unchanged at £130 million over the lifetime of pensions. The scheme was introduced on 1 July 1996, and is designed to provide a fair and reasonable level of pension protection in the event that there is a significant fall in the value of the Hong Kong dollar. The Government have no plans to make any changes to it.

Secondary information