(a)
(b)
(c)
(d)
This
be taken
no steps should introduction of retirement those not already covered, centralised scheme private schemes; instead
to compel the schemes for whether by a
or by compulsory
social welfare provision for groups with specific needs should be enhanced;
a system of prudential regulation for retirement schemes should be introduced;
and
the existing compulsory payment
(LSP)
scheme
employees should be improved.
long service
for
retiring
decision was announced by the Governor in his Address to the Legislative Council on 7 October 1987.
Arguments for and against
5
In taking
the
the decision in 1987, the Government took into account
arguments for and against a Central Provident Fund or other compulsory retirement schemes. The following paragraphs summarise and comment on these arguments.
The Argument for compulsion
6
The principal argument advanced in support of compulsory retirement schemes was that, without them, the burden on the social welfare system would eventually become insupportable as the proportion of elderly people in the . population increases and patterns of family support weaken. Compulsory schemes would ensure that at least those who enjoyed steady employment at a reasonable salary could accumulate savings sufficient to provide a degree of support after retirement. This would result in reduced demands on general revenue, and would enable retired workers to maintain their dignity.
7
In its most idealistic form, the objective of compulsory measures would be to ensure, for the maximum possible number, savings on retirement sufficient to provide support during retirement independently of their families and of social welfare. There were, however, uncertainties as to the level of contribution that could be afforded by employers and employees, rate of investment return, rate of inflation and the length of contribution before retirement, all of which would affect the ability of the compulsory measures to meet the objective in full.