Occupational Retirement Schemes (Amendment) Bill 1995
The Government has proposed to amend the Occupational Retirement Schemes Ordinance to enable occupational retirement schemes to be administered and monitored more effectively.
A Government spokesman said today (Friday) that these proposed changes were in line with the Government's objective in promoting the popularity of private sector occupational retirement schemes.
Details of the proposed amendments are contained in the Occupational Retirement Schemes (Amendment) Bill 1995 published in the Gazette today.
The spokesman said the Bill would enable scheme administrators of pooling agreements to pool together the assets of participating schemes of the same pooling agreement.
The spokesman explained that under section 21 of the existing Ordinance, administrators of schemes governed by trust were required to keep separate the assets of each scheme to help ensure that the scheme assets were not misapplied.
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"However, this requirement has caused practical problems to administrators of pooling agreements where they, in practice, combine not only the administrative duties but also the assets of each participating scheme.
"Strict separation of assets between each of the participating schemes is costly to administer, inhibits diversification of investment and also results in lower returns for scheme members.
"This would discourage the retirement schemes of small-scale employers from joining a pooling agreement and thus defeat the main purpose of forming such agreements.
"Provided that the assets of each scheme are kept separate from the employer and remain under trust, their physical separation from other schemes within the pool is unnecessary," the spokesman said.
Another proposed amendment seeks to enable scheme assets to be invested in mutual funds and in the listed shares of companies on stock markets not recognised by the Securities and Futures Commission (SFC).