there will be a requirement for preservation and portability of benefits until an employee reaches retirement age, except in specified circumstances such as death, total disability or permanent departure from Hong Kong
there will be enhancement of regulatory controls over the operation of registered occupational retirement schemes, and the prudential supervision of scheme administrators and pooled retirement schemes
a system would be developed to deal with benefit losses due to fraud or misfeasance of scheme administrators
a residual pool scheme would be developed to provide coverage for employers unable to find a scheme provider in the open market
Moving the motion, the Secretary for Education and Manpower, Mr Michael Leung, said a system to compensate for losses brought about by unlawful activity would be developed in collaboration with the insurance and fund management industries.
"Such a system could be in the form of a retrospective levy, of a compensation fund, or some other means," he added.
He stressed the Government would in no circumstances consider providing what would in effect be a taxpayers' guarantee against investment losses as to do so would serve only to encourage aggressive or unscrupulous fund management.
But the Government will examine how to minimise the risk of investment loss, for instance by prohibiting over concentration of risks, introducing stricter control of trustees, improving supervision of life insurance companies and requiring adequate capital ratios, ring-fenced assets and transparency of operation.
These will be in addition to existing safeguards already provided under the Occupational Retirement Schemes Ordinance which requires all such schemes to be funded properly and their assets to be maintained separately from those of the employer.
The ordinance also requires the assets of a retirement scheme to be used only for the purposes of the scheme while its financial position must be subject to the annual scrutiny of an independent auditor.
Under the ordinance, assets of retirement funds held under trust belong to the trustee and not to the fund manager and, therefore, will be recovered in the event a fund manager goes bankrupt.