XN000022-1987-10-07 — Page 44

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WEDNESDAY, OCTOBER 7, 1987

"THERE IS A FURTHER ARGUMENT THAT COMPULBORY FUNDS COULD ALSO HAVE AN ADVERSE EFFECT, POSSIBLY A SERIOUSLY ADVERSE EFFECT, ON OUR BCONOMY.

"WE HAVE THEREFORE DECIDED THAT IT WOULD NOT BE RIGHT ΤΟ SET UP A CENTRAL PROVIDENT FUND OR TO MAKE PRIVATE FUNDS COMPULSORY. WE HAVE INSTEAD GIVEN CAREFUL THOUGHT TO OTHER WAYS IN WHICH RETIRED PEOPLE, AND ELDERLY PEOPLE GENERALLY, CAN BE HELPED.

"IN PARTICULAR, WE HAVE LOOKED AT WAYS OF INTRODUCING SUPERVISION OF PRIVATE PROVIDENT FUNDS: IMPROVING SOCIAL SECURITY; AND EXTENDING AND CHANGING THE CHARACTER OF THE LONG SERVICE PAYMENT SCHEME."

SIR DAVID SAID THERE WERE ALREADY A CONSIDERABLE NUMBER OF PROVIDENT FUNDS AND OTHER RETIREMENT SCHEMES, ALL WITHOUT OFFICIAL SUPERVISION OR REGULATION.

IN

THE RECENT INSOLVENCY OF SEVERAL OF THESE FUNDS HAD PROMPTED THE GOVERNMENT TO EXAMINE THE FRAMEWORK WITHIN WHICH THEY OPERATED RELATION TO PRACTICE ELSEWHERE, AND IT WAS CLEAR THAT PRESENT ARRANGEMENTS SUFFERED FROM SOME POTENTIALLY SERIOUS SHORTCOMINGS.

"WE HAVE THEREFORE DECIDED THAT A PROPER REGULATORY FRAMEWORK FOR SUCH FUNDS SHOULD BE ESTABLISHED. THIS WILL ENSURE THAT ASSETS WHICH ARE HELD FOR THE FUTURE BENEFIT OF EMPLOYEES, INCLUDING THEIR OWN SAVINGS, ARE GIVEN AN ADEQUATE MEASURE OF PROTECTION."

A CONSULTATIVE DOCUMENT SETTING OUT THE PROPOSED FRAMEWORK WOULD BE PUBLISHED IN THE NEAR FUTURE.

ON SOCIAL SECURITY PROVISION FOR THE ELDERLY, SIR THE GOVERNMENT PROPOSED TO EXTEND THE OLD AGE ALLOWANCE IN THAT, INSTEAD OF ONLY APPLYING TO THOSE OVER 70, IT WOULD, APPLY TO ALL THOSE OVER 65.

IN ADDITION, IT WAS INTENDED TO INTRODUCE FROM APRIL A HIGHER RATE OF ALLOWANCE FOR THOSE OVER 70.

REGULATORY

DAVID SAID STAGES 80 BY 1991,

1, 1988,

IT WAS ALSO PROPOSED TO DOUBLE THE NORMAL RATE OF DISABILITY ALLOWANCE FOR SEVERELY DISABLED PERSONS WHO DID NOT LIVE IN A GOVERNMENT OR SUBVENTED INSTITUTION, BUT NEVERTHELESS REQUIRED CONSTANT ATTENDANCE FROM ANOTHER PERSON.

"TAKING INTO ACCOUNT THE LIKELY INCREASE OF ABOUT 10 PER CENT IN THE RATES OF PAYMENT OF SOCIAL SECURITY IN APRIL 1988, THE NEW RATES OF OLD AGE ALLOWANCES WILL AMOUNT TO ABOUT $280 PER MONTH FOR THOSE AGED 65-69, $320 FOR THOSE OVER 70, AND $1,120 FOR THE DISABLED WHO REQUIRE CONSTANT ATTENDANCE," HR SAID.

SEVERELY

/BIR DAVID