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WEDNESDAY, DECEMBER 11,
1991
TURNING TO PUBLIC CONCERNS ABOUT THE SECURITY OF EMPLOYEES' BENEFITS IN THE EVENT THAT A PRIVATE SECTOR OPERATED RETIREMENT PROTECTION SCHEME WENT BANKRUPT OR WAS GROSSLY MISMANAGED, MR CHAN SAID LEGISLATION WAS BEING DRAFTED TO PROVIDE EFFECTIVE REGULATION AND SUPERVISION OF PRIVATE SECTOR RETIREMENT SCHEMES.
BUT HE POINTED OUT THAT, WHILE HONG KONG HAD SET ITS FACE AGAINST A MASSIVE CENTRAL PROVIDENT FUND, IT SHOULD NOT ENVISAGE GOING TO THE OTHER EXTREME OF HAVING AN ENDLESS MULTITUDE OF VERY SMALL INDIVIDUAL SCHEMES EACH CATERING FOR A SMALL NUMBER OF EMPLOYEES.
"IN THE CIRCUMSTANCES OF HONG KONG, WHERE THE VAST MAJORITY OF EMPLOYERS ARE SMALL BUSINESSES IN TERMS OF THE NUMBERS EMPLOYED, WE BELIEVE THAT THE SENSIBLE THING TO DO WOULD BE ΤΟ PROMOTE THE ESTABLISHMENT OF A NUMBER OF PROFESSIONALLY MANAGED POOLED SCHEMES AMONG WHICH INDIVIDUAL EMPLOYERS COULD CHOOSE TO JOIN," MR CHAN SAID.
"THERE HAVE BEEN SUGGESTIONS THAT SOME FORM OF GUARANTEE AGAINST FAILURES OF INDIVIDUAL RETIREMENT SCHEMES SHOULD BE PROVIDED, PREFERABLY BY THE GOVERNMENT. THIS IS A DIFFICULT AND COMPLEX ISSUE WHICH WILL REQUIRE THE MOST CAREFUL CONSIDERATION.
"ONE IMPORTANT FACTOR ΤΟ BEAR IN MIND IS THAT ITS VERY EXISTENCE MIGHT LEAD TO OR EVEN ENCOURAGE THE KIND OF IRRESPONSIBLE FUND MANAGEMENT THAT IT IS DESIGNED TO GUARD AGAINST.'
THE SECRETARY ALSO SPOKE OF THE NECESSITY TO DRAW A CONCEPTUAL DISTINCTION BETWEEN RETIREMENT PROTECTION SCHEMES AND SOCIAL SECURITY SCHEMES.
BY ITS VERY NATURE, A RETIREMENT SCHEME IS RELATED TO EMPLOYMENT PRIOR TO RETIREMENT WHILE SOCIAL SECURITY IS ESSENTIALLY A SAFETY NET PROVIDED BY THE COMMUNITY AGAINST UNDUE HARDSHIP OR POVERTY AMONGST ITS INDIVIDUAL MEMBERS.
"RETIREMENT SCHEMES AND SOCIAL SECURITY ARRANGEMENTS USUALLY EXIST SIDE BY SIDE, AND MAY EVEN BE COMBINED IN SOME COUNTRIES, BUT IN ESSENCE THEY ARE DIFFERENT THINGS SERVING DIFFERENT PURPOSES AND OBJECTIVES," MR CHAN SAID.
HE SAID THE WORKING GROUP WAS KEEPING AN OPEN MIND ABOUT POSSIBILITY OF THOSE OUTSIDE THE LABOUR FORCE BEING ABLE PARTICIPATE IN A RETIREMENT SCHEME, PERHAPS ON A VOLUNTARY BASIS.
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"IT IS ALSO EXAMINING SCHEMES WHICH PROPOSE A WIDER COVERAGE TO SEE IF THEY MIGHT MEET OUR OBJECTIVES OR AT LEAST CONTAIN ELEMENTS WHICH COULD BE ADAPTED TO MEET OUR NEEDS," MR CHAN ADDED.
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