FRIDAY, OCTOBER 22, 1993
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WORKFORCE URGED TO JOIN RETIREMENT SCHEMES
ALL EMPLOYERS AND EMPLOYEES SHOULD REALISE THAT THE SOONER THAT THEY START CONTRIBUTING TO A REGISTERED RETIREMENT SCHEME THE BETTER WILL BE THEIR PROVISION FOR A HAPPY AND SECURE OLD AGE, THE SECRETARY FOR
FINANCIAL SERVICES, MR MICHAEL CARTLAND SAID TODAY (FRIDAY).
HE WAS SPEAKING ON HONG KONG'S INSURANCE INDUSTRY AND THE PENSION FUND INDUSTRY AT A LUNCHEON OF THE AMERICAN CHAMBER OF COMMERCE.
THE
HE NOTED THAT A VERY IMPORTANT PIECE OF LEGISLATION OCCUPATIONAL RETIREMENT SCHEMES ORDINANCE
TOOK EFFECT ON OCTOBER 15, REQUIRING ALL RETIREMENT SCHEMES OPERATING IN HONG KONG TO GET REGISTERED.
"THEY MUST BE GOVERNED BY A TRUST OR REGULATED BY AN INSURANCE ARRANGEMENT AND MUST CONFORM WITH FOUR ESSENTIAL CRITERIA, HE SAID,
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"THESE CRITERIA ARE FIRST, SECURITY OF ASSETS BY REQUIRING THEIR SEPARATION FROM THE ASSETS OF THE EMPLOYER AND THEIR MANAGEMENT BY AN INDEPENDENT PARTY; SECOND, ADEQUATE FUNDING; THIRD, REGULAR INDEPENDENT AUDITS AND ACTURIAL REVIEWS; AND FOURTH, DISCLOSURE OF INFORMATION TO SCHEME MEMBERS,
"I
HE EXPLAINED,
THE ORDINANCE ALSO REQUIRES AT LEAST ONE TRUSTEE ΤΟ BE INDEPENDENT OF THE EMPLOYER AND LIMITS SCHEME INVESTMENT SECURITIES OF AN EMPLOYER OR HIS ASSOCIATES TO NOT MORE THAN CENT OF A SCHEME'S ASSETS.
IN
THE
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AND
"THE ORDINANCE, WHICH WILL BE ADMINISTERED BY A REGISTRAR A TEAM OF DEDICATED STAFF, WILL GO A LONG WAY TOWARDS ENSURING THAT MEMBERS OF RETIREMENT SCHEMES WILL RECEIVE THEIR ENTITLEMENTS WHEN THEY FALL DUE,' HE SAID.
THIS OBJECTIVE HAD BEEN REINFORCED BY AN AMENDMENT TO THE INSURANCE COMPANIES ORDINANCE REQUIRING INSURERS TO KEEP ASSETS BACKING LIABILITIES TO RETIREMENT SCHEMES SEPARATE AND DISTINCT FROM ASSETS BACKING OTHER INSURANCE LIABILITIES, HE NOTED.
HE SAID RETIREMENT SCHEMES ALSO PRESENTED CONSIDERABLE OPPORTUNITIES FOR SCHEME ADMINISTRATORS, NAMELY INSURERS, TRUST COMPANIES AND FUND MANAGERS.
AT PRESENT, HE SAID, 35 PER CENT OF HONG KONG'S WORKFORCE WAS ALREADY COVERED BY SOME FORM OF PENSION OR PROVIDENT FUND ARRANGEMENT AND THE PERCENTAGE CONTINUED TO RISE SIGNIFICANTLY.
HE POINTED OUT THAT THE ORDINANCE WOULD ENABLE SMALLER COMPANIES TO PARTICIPATE IN POOLING AGREEMENTS THROUGH WHICH INSURERS AND TRUSTEES COULD POOL THE FUNDS AND THE ADMINISTRATIVE DUTIES ATTACHING TO INDIVIDUAL SCHEMES THEREBY SIMPLIFYING FOR EMPLOYERS, ENSURING A BETTER SPREAD OF PENSION FUND AND REDUCING THE ADMINISTRATIVE COSTS OF EACH SCHEME.
PROCEDURES INVESTMENT
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