XN000022-1993-10-14 — Page 7

THURSDAY, OCTOBER 14, 1993

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REGULATION COMMENCES FOR RETIREMENT SCHEMES

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ALL

OF

PRIVATE SECTOR RETIREMENT SCHEMES ARE REQUIRED ΤΟ BE REGISTERED WITH A NEWLY-APPOINTED REGISTRAR WITH THE COMMENCEMENT THE OCCUPATIONAL RETIREMENT SCHEMES ORDINANCE TOMORROW (FRIDAY).

SPEAKING AT A PRESS CONFERENCE TODAY (THURSDAY), THE SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, SAID: "UNDER THE ORDINANCE, A REGISTRATION SYSTEM WILL BE SET UP FOR VOLUNTARILY ESTABLISHED OCCUPATIONAL RETIREMENT SCHEMES.

"IT WILL ENSURE THAT SUCH SCHEMES ARE PROPERLY REGULATED AND PROVIDE MUCH GREATER CERTAINTY THAT FINANCIAL BENEFITS WILL BE PAID WHEN THEY FALL DUE.

RONG.

THE

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ORDINANCE APPLIES TO ALL SCHEMES OPERATED IN OR FROM HONG

IT STIPULATES MAJOR SAFEGUARDS TO ENHANCE THE SECURITY OF SUCH SCHEMES, INCLUDING THE SEPARATION OF SCHEME ASSETS FROM OTHER EMPLOYER ASSETS, ADEQUATE FUNDING OF THE SCHEMES, REGULAR INDEPENDENT AUDITS AND ACTUARIAL REVIEWS, DISCLOSURE OF INFORMATION TO SCHEME MEMBERS, INDEPENDENT TRUSTEESHIP AND RESTRICTIONS ON INVESTMENTS.

SCHEMES

EMPLOYERS WHO HAVE ESTABLISHED OCCUPATIONAL RETIREMENT THAT FALL WITHIN THE AMBIT OF THE ORDINANCE ARE REQUIRED TO REGISTER THE SCHEME WITHIN A TRANSITIONAL PERIOD OF TWO YEARS AFTER THE ORDINANCE COMMENCES.

NEW SCHEMES

WHICH ARE SET UP DURING THE TRANSITIONAL PERIOD MUST ALSO APPLY FOR REGISTRATION BEFORE THIS TWO-YEAR PERIOD EXPIRES ON OCTOBER 14, 1995.

ANY EMPLOYER WHO INTENDS TO SET UP A NEW SCHEME AFTER THIS TRANSITIONAL PERIOD MUST APPLY FOR REGISTRATION OF THE SCHEME WITHIN THREE MONTHS OF ENTERING INTO A CONTRACT WITH EMPLOYEES TO PROVIDE A RETIREMENT SCHEME.

IT IS AN OFFENCE UNDER THE ORDINANCE FOR AN EMPLOYER TO OPERATE AN OCCUPATIONAL RETIREMENT SCHEME WITHOUT THE NECESSARY REGISTRATION OR EXEMPTION.

YEARS.

OFFENDERS MAY BE SUBJECT TO HEAVY FINE AND IMPRISONMENT FOR TWO

MR CARTLAND SAID THAT ENHANCING RETIREMENT PROTECTION BY REGULATING AND PROMOTING VOLUNTARY RETIREMENT SCHEMES HAD BEEN THE ESTABLISHED POLICY INTENT OF THE GOVERNMENT.

AT PRESENT, ABOUT 35 PER CENT OF ALL EMPLOYEES ARE ALREADY COVERED BY SOME FORM OF PENSION OR PROVIDENT FUND ARRANGEMENT.

WHILE THE MAJORITY OF LARGE CORPORATIONS IN HONG KONG HAVE SET UP SOME FORM OF RETIREMENT PROTECTION FOR EMPLOYEES, ONLY ABOUT 10 PER CENT OF SMALLER TO MEDIUM-SIZED COMPANIES, EMPLOYING FEWER THAN 50 PEOPLE, HAVE ESTABLISHED SCHEMES SO FAR.

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