XN000022-1993-12-15 — Page 17

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WEDNESDAY, DECEMBER 15, 1993

**WE DELIBERATION.

HAVE

REACHED

THIS CONCLUSION

AFTER PROLONGED

ONLY THE DECISIONS THAT WE TAKE ON THIS ISSUE THE WELL-BEING NOT ONLY OF TODAY'S WORKFORCE BUT THAT WELL INTO NEXT CENTURY.

"TO

WILL AFFECT OF EMPLOYEES

TRULY MEETS ENSURE THAT WE PUT IN PLACE THE SYSTEM WHICH

KEEP BOTH THIS THE NEEDS OF THIS COMMUNITY, WE SHALL CONTINUE TO COUNCIL AND THE PUBLIC AT LARGE CLOSELY INVOLVED IN THE DEVELOPMENT OF OUR PROPOSALS, HE ADDED.

וי

I.E. PROTECTION

A

MR LAM ALSO EXPLAINED TO COUNCIL MEMBERS WHY THE GOVERNMENT DID

PLANS, SAVINGS NOT FAVOUR THE

COMPULSORY TWO OTHER EMPLOYMENT-RELATED DECENTRALISED, SYSTEM (RPS) AND A CENTRAL PROVIDENT FUND (CPF).

MANDATORY RETIREMENT

TOGETHER WITH THE

HE NOTED THAT BASED ON INTERNAL REVIEW, TECHNICAL ADVICE FROM EXPERT CONSULTANTS, THE GOVERNMENT WAS CONVINCED

THAN PROBLEMS

WAS ORIGINALLY THAT AN RPS HAD INDEED MORE SEVERE BELIEVED.

IN HONG YIELD

FOR EXAMPLE, GIVEN THE FORESEEABLE MARKET CONDITIONS KONG, AN RPS WOULD HAVE TO BE INVESTED IN STOCKS AND SHARES TO MEANINGFUL RETURNS.

HOWEVER, SUCH INVESTMENTS INVOLVE THE RISK OF LOSSES, FOR WHICH GUARANTEE. THERE IS NO VIABLE INSURANCE COVER OTHER THAN A GOVERNMENT BUT IT WOULD BE UNFAIR TO ASK TAXPAYERS TO UNDERWRITE SUCH LOSSES.

AN RPS WOULD IMPOSE A HEAVY ADMINISTRATIVE BURDEN ON AND EMPLOYEES, WITHOUT THE GUARANTEE OF COMMENSURATE BENEFITS.

EMPLOYERS

AUTHORISE,

FURTHERMORE, IT WOULD REQUIRE HUGE BUREAUCRACIES TO VET, REGULATE, AND TO SETTLE DISPUTES ARISING FROM THE LARGE NUMBER OF PRIVATE SCHEMES.

HONG KONG. A CPF IS ALSO NOT THE RIGHT WAY FORWARD FOR SIMPLY WOULD NOT MEET THE COMMUNITY'S REQUIREMENT BECAUSE:

IT

DUE

INVESTMENT RETURNS ARE TYPICALLY FAR FROM SATISFACTORY TO THE FACTS THAT CENTRAL FUND MANAGERS INEVITABLY CHOOSE TO PLAY SAFE AND LOW RETURNS TEND TO PUSH UP CONTRIBUTION RATES ELSEWHERE;

HIGHLY

A CPF NEEDS DECADES TO MATURE AND ITS FINAL YIELD IS SENSITIVE TO EVEN VERY MINOR VARIATIONS IN AVERAGE RETURNS;

*

IF A CPF LOSES MONEY, TAXPAYERS WOULD BE EXPOSED TO PRESSURE TO MAKE UP THE LOSSES;

DIRECT

*

AS

WITH

AN RPS, A

CPF

IMPOSES DAUNTING ADMINISTRATIVE SATISFACTORY BURDENS ON THE COMMUNITY BUT DOES NOT OFFER A SOLUTION TO THE PROBLEM OF FINANCIAL PROVISION FOR OLD AND

AGE:

WORST

ALL, OF

CONTRIBUTORS

WOULD NOT HAVE RETIREMENT PROTECTION FOR AT LEAST 30 TO 40 YEARS.

/COMPARED WITH

ADEQUATE