XN000022-1994-08-19 — Page 2

FRIDAY, AUGUST 19, 1994

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PENSION SCHEME OFFERS DIGNIFIED SECURITY FOR ELDERLY

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THE PROPOSED OLD AGR PENSION SCHEME WILL OFFER A DIGNIFIED FORM FINANCIAL SECURÍTY FOR ALL ELDERLY POPULATION, IN HONG KONG, AT A VERY AFFORDABLE PRICE TO THE COMMUNITY, THE ACTING GOVERNOR, MRS ANSON CHAN, SAID.

RESPONDING TO COMMENTS ABOUT THE SCHEME AT THE TUNG WAH GROUP OF HOSPITALS' LUNCHEON MEETING TODAY (FRIDAY), SHE SAID ITS GREAT ADVANTAGE WAS THAT IT MET THE COMMUNITY'S OBLIGATIONS TO PROVIDE \ BASIC INCOME FOR THE ELDERLY AS A WHOLE.

IT NEITHER RXCLUDES EMPLOYEES WHOSE CAREERS HAVE BEEN INTERRUPTED, FOR EXAMPLE BY RAISING FAMILIES OR CARING FOR INFIRM OR DISABLED RELATIVES, NOR DISCRIMINATES AGAINST THE LESS PRIVILEGED MEMBERS OF THE WORK FORCE.

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'THE GOVERNMENT'S PROPOSALS ALSO OFFER THE SIMPLEST SOLUTION TO THE PROBLEM, SHE SAID.

IF THE SCHEME ONLY COVERED FULLY PAID-UP EMPLOYEES, A PARALLEL BUT SEPARATE SCHEME WOULD HAVE TO BE SET UP TO TAKE CARE OF THE SUBSTANTIAL PROPORTION OF THE POPULATION WHO ARE OUTSIDE THE WORK FORCE AND THE EXISTING ELDERLY GROUP WHO HAVE NEVER CONTRIBUTED TO THE NEW SCHEME, SHE SAID.

ON SUGGESTIONS OF RELYING MORE ON THE VARIOUS RETIREMENT BENEFITS OFFERED BY EMPLOYERS, MRS CHAN SAID THE GOVERNMENT COULD NOT LEAVE THE FINANCIAL SECURITY OF THE ELDERLY TO THE EMPLOYMENT-RELATED SCHEMES.

UNLIKE THE GOVERNMENT'S PROPOSALS, THESE SCHEMES RARELY OFFER REGULAR MONTHLY BENEFITS WHICH ARE INFLATION-PROOF.

IT

INSTEAD, THE SCHEMES USUALLY PROVIDE A LUMP SUM ON RETIREMENT. TAKES SKILFUL INVESTMENT MANAGEMENT TO PROVIDE FINANCIAL SECURITY INTO OLD AGE.

THE EMPLOYMENT-RELATED SCHEMES WILL DO NOTHING TO ASSIST THOSE WHO HAVE ALREADY RETIRED, THOSE WHO WILL RETIRE IN THE FUTURE BEFORE THEY HAVE BEEN MEMBERS OF SUCH SCHEMES LONG ENOUGH TO ACCUMULATE THE MAXIMUM BENEFITS, AND THOSE WHO HAVE NOT BEEN PART OF THE WORK FORCE.

HOWEVER, MRS CHAN SAID THE EMPLOYMENT-RELATED SCHEMES WOULD CONTINUE TO MAKE AN IMPORTANT CONTRIBUTION BY PROVIDING VALUABLE ADDITIONAL RESOURCES IN RETIREMENT.

REFERRING TO COMPLAINTS ABOUT ESTABLISHING A "WELFARE STATE" SAID THE GOVERNMENT'S PROPOSALS WOULD NOT CREATE A "WELFARE

SHR STATE",

"INSTEAD, THEY WILL PROVIDE A BASIC INCOME FOR OLD AGE, STRICTLY BY CONTRIBUTIONS INSTEAD OF SOLELY BY THE TAXPAYER.

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FUNDED

THE GOVERNMENT IS MOVING AWAY FROM THE OLD WELFARE-STYLE FINANCIAL HELP FOR THE ELDERLY TO A SCHEME THAT IS MORE IN LINE WITH HONG KONG'S PRESENT LEVEL OF ECONOMIC DEVELOPMENT AND CURRENT SOCIAL ASPIRATIONS, SHE SAID.

/TURNING TO