XN000022-1994-03-12 — Page 2

SATURDAY, MARCH 12, 1994

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CONSULTANTS APPOINTED TO CARRY OUT FEASIBILITY STUDY ON OLD AGE PENSION SCHEME

THE

APPOINTMENT OF

GOVERNMENT ANNOUNCED TODAY (SATURDAY) THE THE WYATT COMPANY (HK) LTD, ACTUARIES AND CONSULTANTS, THE FEASIBILITY STUDY ON THE PROPOSED CONTRIBUTORY OLD SCHEME (OPS).

TO UNDERTAKE AGE PENSION

THE CONSULTANTS WILL BE REQUIRED TO ADVISE THE GOVERNMENT ON FEASIBLE OPTIONS FOR FINANCING AND ADMINISTERING THE OPS, COMMENSURATE WITH THREE GUIDING PRINCIPLES:

THE OPS SHOULD PROVIDE REGULAR PENSION BENEFITS FOR THE AGED WHO SATISFY ESTABLISHED ELIGIBILITY CRITERIA (SUCH AS

AGE, RESIDENCE);

* PENSION PAYOUTS UNDER THE OPS MUST BE FINANCED IN FULL BY CONTRIBUTIONS COLLECTIBLE FROM EMPLOYERS, EMPLOYEES, THOSE PERSONS IN RECEIPT OF REGULAR INCOME ALBEIT NOT FROM ENGAGEMENT AS EMPLOYEES, FOR EXAMPLE THE SELF-EMPLOYED, TOGETHER WITH THE AMOUNTS THAT THE GOVERNMENT WILL PLOUGH BACK AFTER SUBSUMING THE OLD AGE ALLOWANCE, THE HIGHER OLD AGE ALLOWANCE AND THOSE BASIC ELEMENTS OF THE COMPREHENSIVE SOCIAL SECURITY ASSISTANCE SCHEME PRESENTLY PAYABLE TO THE AGED; AND

ADMINISTRATION OF THE OPS MUST BE AS SIMPLE AND USER- FRIENDLY AS POSSIBLE.

**

"IT IS IMPORTANT THAT WE GET THE SCHEME RIGHT, A GOVERNMENT SPOKESMAN STRESSED, ADDING THAT THE CONSULTANTS WOULD BE OFFERING ADVICE AND SPECIFIC RECOMMENDATIONS ON A NUMBER OF KEY AREAS. THESE INCLUDE:

*

HOW SUCH A SCHEME COULD BE ESTABLISHED IN PRACTICE, INCLUDING THE MACHINERY REQUIRED TO ADMINISTER AND ENFORCE THE OPS, AND THE MECHANISM FOR COLLECTING CONTRIBUTIONS AND MAKING PAYMENTS. SPECIFIC ADVICE IS REQUIRED AS TO HOW THE SELF-EMPLOYED AND THOSE PERSONS IN RECEIPT OF REGULAR INCOME BUT WHO ARE CURRENTLY OUTSIDE THE TAX NET CAN BE BROUGHT INTO THE OPS AS CONTRIBUTORS;

RESIDENCE QUALIFICATIONS FOR POTENTIAL OPS CONTRIBUTORS AND BENEFICIARIES. THIS ADVICE WOULD ALSO CONSIDER WHETHER MIGRANT WORKERS, FOR EXAMPLE, THOSE EMPLOYED IN HONG KONG UNDER THE IMPORTED LABOUR SCHEME, OR FOREIGN DOMESTIC HELPERS SHOULD PARTICIPATE IN THE SCHEME:

WHETHER PENSIONS SHOULD BE PAID ΤΟ PERSONS WHO HAVE EMIGRATED, INCLUDING THOSE WHO CHOOSE TO SETTLE IN MAINLAND CHINA AFTER RETIREMENT;

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