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aef1.mr/kw/16.17.1
(b)
(c)
(d)
CONFIDENTIAL
To what extent would an interest rate guarantee cover exchange rate risk?
Coverage; limited to past service only upto date of introduction, or service to 1997, or beyond?
Trust Fund (eg Provident Fund Scheme)
employer/employee
contributions:
can
be done
retrospectively or only covers future service (ie from date of introduction)?
Insurance-based scheme
Insurance company/companies purchases block of annuities from employer, assuming mortality and interest rate risk, in return for future payments by employer.
Hybrids
(iii)(a) plus (iii)(b) (to cover past and future
service);
(ii) plus (iii)(a), (iii)(b), or (iii) (c) to reduce and
spread element of private sector funding.
Legislative aspects
Tax aspects
Legislation on compulsory retirement schemes (likely to increase demand for long maturity fixed ratio HK $
paper).
IR reluctance to allow borrowing in respect of future
pension entitlements; worried about benefits from tax
breaks designed for income on retirement, but under
above options gains not realised ahead of retirement.