2
(b)
(c)
alternative
on
Projections are made on the basis of
rates of real return investment: 2.5% (a round ing up of the 2.37% average real rate of return achieved by the Subsidised Schools Provident Fund over the period 1973-1983) and 4% (which would represent the higher end of realistic expectations)
On the basis of available information about the administrative costs of the Singapore fund, it is assumed that costs would be equivalent to 2.25% of contributions at a 10% contribution rate. At rates of 15% and 20%, the corresponding percentages would be 1.5% and 1.125%. This assumes that higher costs resulting from greater labour mobility in Hong Kong are offset by the greater complexity of the Singapore scheme (which provides for housing and medical benefits). The larger size of the workforce in Hong Kong should enable economies of scale
scale to be
to be achieved, but the effect is difficult to estimate. The level of benefits payable is, however, relatively insensitive to changes in the level of administrative costs assumed.
The models
4.
Based on these assumptions, and assuming contribution periods respectively of 40 years, 30 years and 20 years, with a common end-date, the number of months' final salary produced by the CPF at each rate of contribution has been calculated as follows:-
Number of Months' Final Salary Accruing
Contribution Period
Assumed Rate of Return
40 years 2.5%
4%
30 years 2.5% 4%
20 years 2.5%
4%
причем
Rate of Joint Contribution
10% 15%
20%
43.3
58.2 65.4 87.9 87.6 117.6
33.2 41.5 22.7 26.3 50.2 62.6 34.3 67.2 83.8 45.9
39.7
53.2
CONFIDENTIAL