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WEDNESDAY, JULY 10, 1991
FIRSTLY,
THE SETTING UP OF SUCH A FUND OR RETIREMENT SCHEMES TO SAFEGUARD THE LIVELIHOOD OF EMPLOYEES AFTER THEIR RETIREMENT WAS BASED ON THE ASSUMPTION THAT THESE RETIREES, BEFORE THEIR RETIREMENT, HAD WORKED CONTINUOUSLY FOR A CONSIDERABLE LENGTH OF TIME AND HAD A STEADY AND MODERATE INCOME.
HE
SAID ONLY UNDER THESE CIRCUMSTANCES COULD A PROVIDENT FUND BE MOST EFFECTIVE.
"HOWEVER, EMPLOYEES MEETING THESE REQUIREMENTS GENERALLY REALISE THE NEED TO PROVIDE FOR THEIR FUTURE AND ARE CAPABLE OF DOING SO THROUGH SAVING AND INVESTMENT EVEN WITHOUT RETIREMENT SCHEMES, HE SAID.
BESIDES, MR CHAN SAID A FAIR NUMBER OF THEM HAD ALREADY JOINED PROVIDENT FUND SCHEMES ORGANISED BY PRIVATE FIRMS.
ON THE OTHER HAND, THE CENTRAL PROVIDENT FUND OR COMPULSORY RETIREMENT SCHEMES WERE OF NOT MUCH HELP TO THE LOW PAID OR THOSE WITHOUT REGULAR EMPLOYMENT IN SOLVING THEIR PROBLEMS AFTER RETIREMENT.
THE SECRETARY SAID THE GOVERNMENT'S OTHER MAIN CONSIDERATION WAS THAT THE CENTRAL PROVIDENT FUND WAS ACTUALLY A COMPULSORY SAVING SCHEME WHICH, ONCE IMPLEMENTED, MIGHT HAVE QUITE SERIOUS EFFECTS ON THE ECONOMY.
HE EXPLAINED THAT SINCE WORKERS WERE REQUIRED ΤΟ CONTRIBUTE TOWARDS THE PROVIDENT FUND, THEIR MONTHLY DISPOSABLE INCOME WOULD BE REDUCED CORRESPONDINGLY. MEANWHILE, COST FOR EMPLOYERS WOULD BE INCREASED AS THEY HAD TO CONTRIBUTE TO THE FUND.
'ALTHOUGH SUCH COST INCREASES MAY ULTIMATELY BE ABSORBED INTO THE EMPLOYEES' WAGES OR OTHER FRINGE BENEFITS, BUSINESS LOSS CAUSED BY SUCH COST INCREASE MAY HAVE ADVERSE EFFECTS ON OUR OVERALL ECONOMY, HE ADDED.
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IN ADDITION, A LARGE AMOUNT OF CAPITAL PLACED UNDER THE CENTRAL PROVIDENT FUND MUST ALWAYS LOOK FOR THE BEST YET NOT TOO VENTUROUS INVESTMENT OPPORTUNITIES, RESULTING IN MASSIVE CAPITAL FLOWING IN AND OUT OF THE FINANCIAL SYSTEM, THUS IMPOSING GREAT PRESSURE ON THE FINANCIAL MARKET AND THE LINKED EXCHANGE RATE SYSTEM.
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