XN000022-1987-05-13 — Page 21

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WEDNESDAY, MAY 13, 1987

HE SAID THAT UNDER THE PRIVATE PROVIDENT FUND SCHEMES THE FUND SHOULD PREFERABLY COVER ALL WAGE-EARNERS IN THE SAME ESTABLISHMENT, WITH CONTRIBUTIONS TO BE MADE BY EMPLOYERS AND EMPLOYEES AT THE SAME RATE.

BENEFITS TO THE EMPLOYEE, TO BE CALCULATED ON THE BASIS OF THE BALANCE CREDITED TO THE EMPLOYEE'S ACCOUNT PLUS INTEREST GAINED. SHOULD BE PAYABLE UPON RETIREMENT OR INVALIDITY OR TRANSFER TO ANOTHER RETIREMENT SCHEME ON CHANGE OF EMPLOYMENT, OR PAYABLE TO HIS SURVIVOR IN THE EVENTUALITY OF DEATH.

HE SAID THE FUND SHOULD BE MANAGED BY PRIVATE INVESTMENT INSTITUTIONS AND SUBJECT TO GOVERNMENT MONITORING AND REGULATION.

DR HO NOTED THAT AT PRESENT THERE WERE SOME 700 APPROVED PRIVATE PROVIDENT FUNDS AND RETIREMENT SCHEMES CATERING FOR ABOUT 300 000 WORKERS. ABOUT 50 NEW SCHEMES WERE APPROVED EACH MONTH FOR THE PAST YEAR.

+WITH CONSCIOUS EFFORT ON THE PART OF THE GOVERNMENT TO ENCOURAGE AND PROMOTE THE SETTING UP OF SUCH SAVINGS SCHEMES, 1 AM CONFIDENT THAT THE GROWTH OF PRIVATE PROVIDENT FUNDS WILL BE FURTHER ACCELERATED,+ HE SAID.

HE SAID A DECENTRALISED PROVIDENT FUND SCHEME, BUILT ON A VOLUNTARY BASIS. WOULD ONLY GENERATE AN INCREMENTAL IMPACT ON THE FINANCIAL MARKET AND LIMIT DISRUPTION TO THE INDUSTRY'S PERFORMANCE, THUS MAKING IT MUCH EASIER FOR THE ECONOMY TO ADJUST AND to MAINTAIN ITS EQUILIBRIUM.

*THE RUN-UP TO 1997 IS A MOST SENSITIVE PERIOD: THE MASSIVE ABRUPT DISRUPTIONS ASSOCIATED WITH THE INTRODUCTION OF A COMPULSORY CENTRAL PROVIDENT FUND WOULD PROVE TO BE TOO DEVASTATING FOR OUR ECONOMY AND WOULD SHATTER THE BUSINESS CONFIDENCE, LOCAL AND OVERSEAS, HE SAID.

AS THE PROVIDENT FUND SCHEME WAS A VERY COMPLEX SYSTEM, FUSED WITH MANY UNCERTAIN LONG-TERM IMPLICATIONS AND FAR- REACHING CONSEQUENCES, DR HO SUGGESTED THAT A COMMISSION COMPOSED OF LABOUR AND EMPLOYER REPRESENTATIVES AND INVESTMENT AND ACTUARIAL EXPERTS SHOULD BE SET UP TO UNDERTAKE AN IN- DEPTH STUDY OF THE ISSUE.

DR HO SAID A NUMBER OF IMPORTANT DETAILS OF THE PROVIDENT FUND SCHEME WARRANTED SERIOUS DISCUSSION. FIRSTLY

FIRSTLY, HE SAID, THE LEVEL OF CONTRIBUTION MUST BE KEPT AFFORDABLE BY BOTH THE EMPLOYER AND EMPLOYEES.

HE SAID