(b)
(c)
71.
The Administration is aware that the three institutions concerned, viz. the University of Hong Kong (HKU), the Chinese University of Hong Kong (CUHK) and the Hong Kong Polytechnic University (PolyU) are actively pursuing measures to improve the long term financial position of their superannuation schemes and to ensure that the schemes comply with the requirements for registration under the Occupational Retirement Scheme Ordinance (ORSO). Having completed its staff consultation, the CUHK has given approval to amend the Regulations of its existing scheme to ensure its solvency and will also introduce a new scheme to which members may opt by which benefits will vary according to the investment return of the pension fund. The HKU is considering amending its existing scheme to a "variable defined benefits" scheme which would provide for negative adjustments when times are unfavourable. Lastly, the PolyU is considering modifying the "defined benefits" nature of its scheme into "variable benefits" to make the scheme registrable under ORSO. The Administration understands that the institutions concerned are already consulting their staff regarding these measures.
There is no statutory power under the ORSO by which to exempt the superannuation schemes of the tertiary institutions. An exemption would require legislative amendment. However, the ORSO does not require a specified level of contributions to or benefits from occupational retirement schemes. This is a matter for the scheme operators to decide. What ORSO requires is that every scheme be 100 percent solvent, that is, contributions must be sufficient to finance benefits in the long term. To achieve this level of solvency, operators may either reduce benefits or increase contributions. The operators of the schemes in question have not yet sought to register them under the ORSO. Nor have they presented the Registrar with a case for exemption. However, excluding the schemes from the Ordinance would not solve their problem. It would merely defer it to a future date.
End/Wednesday, March 29, 1995