XN000022-1993-10-22 — Page 5

FRIDAY, OCTOBER 22, 1993

"THERE IS NOTHING NEW ABOUT POOLING ARRANGEMENTS BUT IT IS THE OF GOVERNMENT AND SCHEME ADMINISTRATORS ΤΟ PROMOTE SUCH ARRANGMENTS AND ENSURE THAT THEY ARE PROPERLY MANAGED, HE SAID.

TASK

"I

AND

MR CARTLAND ALSO SAID EMPLOYERS WHO ESTABISHED RETIREMENT SCHEMES FOR THEIR EMPLOYEES WOULD BE BETTER POSITIONED TO ATTRACT RETAIN ABLE AND MOTIVATED STAFF.

"THEY WILL ENJOY TAX RELIEF ON THEIR SCHEME CONTRIBUTIONS WILL BE ABLE TO OFFSET SCHEME BENEFIT PAYMENTS AGAINST STATUTORY SERVICE PAYMENTS UNDER THE EMPLOYMENT ORDINANCE.

AND

LONG

"SHORTAGE OF LABOUR IN HONG KONG MAKES FOR A HIGHLY MOBILE AND COMPETITIVE JOB MARKET. OFFERING RETIREMENT BENEFITS NOT ONLY IMPROVES AN EMPLOYER'S COMPETITIVE EDGE BUT ALSO

DISCOURAGE INDISCRIMINATE JOB-HOPPING," HE ADDED.

SERVES TO

DECISION ON

HE STRESSED THAT REGARDLESS WHAT THE GOVERNMENT'S THE ISSUE OF CENTRAL PROVIDENT FUND MIGHT BE, THE OBLIGATIONS ARISING FROM EXISTING SCHEMES WOULD NOT AND COULD NOT BE OVERTURNED OR

UNDERMINED.

HE ALSO ARGUED THAT EMPLOYERS SHOULD NOT WAIT TO SEE WHAT DIRECTION THE GOVERNMENT WOULD BE TAKING BEFORE DECIDING WHETHER TO ESTABLISH A SCHEME FOR THEIR EMPLOYEES.

ALTHOUGH THE GOVERNOR INTENDED TO ANNOUNCE PROPOSALS ON THE WAY FORWARD BEFORE THE END OF THE YEAR, IT WAS BY NO MEANS CERTAIN THAT ANY MORE COMPREHENSIVE ARRANGEMENTS WOULD BE INTRODUCED, HE SAID.

"EVEN IF THEY WERE, IT WOULD BE SOME YEARS AFTER THAT BEFORE ANY SUCH ARRANGEMENTS COULD BE IMPLEMENTED AND ENTITLEMENTS STARTED TO ACCRUE.

IN THE MEANTIME, EMPLOYEES SHOULD BE SAVING FOR THEIR RETIREMENT. THERE IS NOTHING TO BE GAINED BY DELAY.

"TO MAXIMISE EVENTUAL BENEFITS, EMPLOYEES SHOULD START CONTRIBUTING SOONER RATHER THAN LATER.

"AND THE ONLY AVENUE PRESENTLY AVAILABLE FOR THEM TO DO SO IS BY JOINING A REGISTERED OCCUPATIONAL RETIREMENT SCHEME, HE SAID.

"

ON THE INSURANCE INDUSTRY, MR CARTLAND NOTED THAT HONG KONG'S OPEN ECONOMY HAD PROMPTED 228 INSURERS TO BECOME REGISTERED HERE THE LARGEST NUMBER PER CAPITA AMONG DEVELOPED INSURANCE MARKETS.

"IN SEEKING TO MAKE CERTAIN THAT POLICY HOLDERS' INTERESTS ARE PROTECTED, WE HAVE TRADITIONALLY RELIED, AND CONTINUE TO RELY, UPON SELF-REGULATION BY INSURERS TEMPERED BY LEGISLATION WHICH ENABLES GOVERNMENT TO INTERVENE ON BEHALF OF POLICY HOLDERS, BUT ONLY WHEN NECESSARY, HE SAID.

"TO ENHANCE OUR PRUDENTIAL SUPERVISION WE HAVE THIS YEAR ENACTED LEGISLATION REQUIRING AUDITORS AND ACTUARIES TO WARN THE INSURANCE AUTHORITY WELL IN ADVANCE OF ANY DIFFICULTIES THAT MAY AFFECT AN INSURER, IN PARTICULAR WHEN IT'S OVERSEAS OFFICES ARE SUBJECT TO INSOLVENCY PROCEEDINGS OR UNDER SUSPICION OF FRAUD.

/FURTHER PROPOSALS