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WEDNESDAY, FEBRUARY 3, 1993
FIRST, IT ARE AGED OTHERWISE.
WOULD NOT BE RIGHT TO ASSUME THAT ALL THOSE WHO ARE ON THE EDGE OF POVERTY. THE FACTS INDICATE LESS THAN 10% OF OUR TOTAL POPULATION AGED 65 OR ABOVE ARE IN NEED OF PUBLIC ASSISTANCE;
SECONDLY, WE DO HAVE A SOCIAL SECURITY SYSTEM, AND A NON- CONTRIBUTORY ONE AT THAT, PROVIDING BENEFITS FOR THE ELDERLY, THE DISABLED AND THE DISADVANTAGED. THAT SYSTEM WILL REMAIN IN PLACE, OPERATING IN PARALLEL WITH ANY RETIREMENT PROTECTION SYSTEM WE MAY DECIDE TO INTRODUCE.
FINANCIAL GUARANTEE
I TURN NOW TO THE QUESTION OF A FINANCIAL GUARANTEE, WHICH HAS BEEN A FOCUS OF DISCUSSION SINCE THE CONSULTATION PAPER WAS PUBLISHED. THERE HAVE BEEN MANY CALLS FOR THE GOVERNMENT TO ACT AS THE FINAL GUARANTOR FOR BENEFITS ACCRUED UNDER RETIREMENT PROTECTION SCHEMES, BEARING EITHER ALL THE FINANCIAL RISKS OR, AT LEAST, THE RISKS OF SCHEMES FAILING AS A RESULT OF FRAUD. ON THIS QUESTION I CAN ONLY REPEAT WHAT I SAID ON 18 NOVEMBER 1992 WHEN THE COUNCIL LAST DEBATED ON A MOTION CONCERNING THE PROPOSED RETIREMENT PROTECTION SYSTEM. I SAID ON THAT OCCASION, AND IF I MAY QUOTE MYSELF: "IF THE GOVERNMENT WERE TO PROVIDE A GUARANTEE FOR ALL RETIREMENT SCHEMES, THE TAXPAYER WOULD HAVE TO ACCEPT AN IMMENSE CONTINGENT LIABILITY. THE COMMITMENT WOULD BE PERMANENT AND EVER INCREASING AND IT COULD WELL BE COUNTER- PRODUCTIVE IF IT WERE TO ENCOURAGE SOME FUND MANAGERS TO TAKE GREATER THAN NORMAL RISKS, IN THE KNOWLEDGE THAT THEY WOULD BE BAILED OUT BY THE TAXPAYER IF THEIR JUDGEMENT PROVED TO BE WRONG." THIS STATEMENT CONTINUES TO REFLECT THE ADMINISTRATION'S CONCERN.
WE ARE, OF COURSE, NOT OBLIVIOUS TO THE CONCERN EXPRESSED BY MANY PEOPLE THAT THEIR LIFELONG SAVINGS MIGHT BE LOST, AND THE RETIREMENT PROTECTION TO WHICH THEY HAVE BEEN LOOKING MIGHT DISAPPEAR, AS A RESULT OF A SCHEME FAILING. THIS CONCERN IS UNDERSTANDABLE AND LEGITIMATE, AND WE WILL NEED TO FIND AN APPROPRIATE WAY OF ADDRESSING IT. BUT EVEN IF A GOVERNMENT GUARANTEE WERE PRACTICABLE, AND THIS MUST BE A MATTER OF VERY CONSIDERABLE DOUBT, IT WOULD AT BEST BE A NEGATIVE SOLUTION, A PREPARATION FOR FAILURE. IT WOULD BE FAR MORE POSITIVE ΤΟ TAKE STEPS ΤΟ ENSURE THAT THE SYSTEM WILL OPERATE PROPERLY AND SUCCESSFULLY. WE ARE PROPOSING TO DO JUST THAT. THERE IS NO QUESTION OF THE GOVERNMENT WISHING
ABROGATE ITS RESPONSIBILITY FOR MONITORING THE OPERATION OF RETIREMENT PROTECTION SCHEMES. THE RECENTLY ENACTED OCCUPATIONAL RETIREMENT SCHEMES ORDINANCE PROVIDES A FIRM BASIS FOR AN EFFECTIVE MONITORING AND SUPERVISORY SYSTEM AND WE HAVE EVERY INTENTION OF BUILDING ON IT.
כיו'
I BELIEVE THERE IS SOME ACCEPTANCE OF THE VIEW THAT A GOVERNMENT GUARANTEE FOR ALL RETIREMENT BENEFITS IS SIMPLY NOT POSSIBLE. SOME COMMENTATORS HAVE PROPOSED THAT WE SHOULD ADOPT A PARTIAL GUARANTEE, OR SET UP AN INSURANCE FUND. MY INITIAL REACTION TO THE CONCEPT OF A PARTIAL GUARANTEE IS TO ASK HOW WE DEFINE PARTIAL. IT WOULD NOT BE AN EASY TASK. AS FOR SETTING UP AN INSURANCE WOULD ONLY OBSERVE AT THIS STAGE THAT ANY INSURANCE SCHEME INVOLVES COST WHICH MUST, DIRECTLY OR INDIRECTLY, EVENTUALLY FALL TO BE BY THE BENEFICIARY.
FUND, I
A
BORNE
/CENTRAL PROVIDENT FUND