Social Welfare Advisory Committee. The Committee considered that there was need to provide for greater security in old age given the fact that the population was aging and that social and family values were changing. A compulsory provident fund arrangement would not do away with the need for social security, but would ensure that the majority made some financial provision for old age. A centralised fund run by the Government or a statutory authority was not necessary. Private funds could fulfil the required function if they were properly accredited and regulated by the Government. Any scheme should be compulsory and cover the self-employed and small undertakings.
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Hong Kong Association of Banks. The Association felt that any form of compulsory savings scheme would be contrary to the Government's policy of non-intervention in matters which could be adequately handled by the private sector. Government should take positive steps to encourage the trend towards voluntary establishment of private provident funds. Such steps would include active promotion and recognition of private funds of good standing by means of a system of compulsory licensing and regulation. If, nevertheless, political considerations dictated establishment of a compulsory scheme, this should operate through approved private funds with standardised terms and conditions and providing, among other things, for portability of benefits.
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Life Insurance Council of Hong Kong. The Council was strongly against centralised or compulsory schemes for the same reasons as the HKAB. It favoured instead improvements to existing legislation, notably the long service payment scheme, and encouragement of private schemes. In regard to the latter, the Council recommended development of a model scheme setting out minimum standards and providing for portability of benefits. Employee contributions should attract tax relief and there contribute. regulation.
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the
should be provision for the self-employed to Private funds should also be subject to tighter
Discussion Group on the Hong Kong Economy. The conclusions of the review paper with regard to the economic implications of establishing a CPF were broadly supported by 34 academic economists who attended meetings of the Group. In particular, there was general agreement that, while the economy would adjust over time to the presence of a CPF, the adjustments required in the interim would be both substantial and disturbing. There were differing views about the extent to which a CPF would increase net savings in the community, a factor relevant to the strength of the effect on consumption spending and related business activity and to the extent of the monetary and investment implications described
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