TNAG-2097-FCO40-2986-HM-Overseas-Civil-Service-(HMOCS)-general-correspondence-1990 — Page 78

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FM HONG KONG

TO DESKBY 211130Z F C O

TELNO 2829

OF 21102OZ SEPTEMBER 90

INFO ROUTINE HKGO LONDON

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HKB 431

A

+31 14 TOP COPY

Q DIST?

030C 1990

82

040331

MDHIAN 0377

YOUR TELNO 1735: PENSION PROVISIONS IN HONG KONG

SINCE THE 1960S, THERE HAVE BEEN PERIODIC CALLS FOR THE ESTABLISHMENT OF A CENTRAL PROVIDENT FUND (CPF) IN HONG KONG. THE IMPLICATIONS OF ESTABLISHING A CPF WERE PREVIOUSLY CONSIDERED BY WORKING PARTIES IN 1966 AND 1976. ON BOTH OCCASIONS, THE BALANCE OF THE ARGUMENTS WAS FOUND TO BE AGAINST THE SETTING UP OF A CPF.

2.

RENEWED CALLS FOR A CPF WERE MADE DURING THE 1985 DEBATE ON THE GOVERNOR'S LEGCO ADDRESS. AS A RESULT, THE ADMINISTRATION RENEWED THE ARGUMENTS FOR AND AGAINST A CPF. WORKING GROUPS WERE SET UP TO EXAMINE THE ADEQUACY OF THE EXISTING FRAMEWORK OF SOCIAL SECURITY PROVISIONS: POSSIBLE MEANS OF PROMOTING THE ESTABLISHMENT OF PRIVATE PROVIDENT FUNDS ON A VOLUNTARY BASIS: AND THE NEED FOR PRUDENTIAL SUPERVISION OF PRIVATE RETIREMENT SCHEMES. THE GOVERNOR-IN-COUNCIL SUBSEQUENTLY DECIDED IN SEPTEMBER 1987 THAT NO STEPS SHOULD BE TAKEN TO MAKE RETIREMENT FUNDS COMPULSORY. INSTEAD, THE SUPERVISION OF PRIVATE PROVIDENT FUNDS WOULD BE IMPROVED: SOCIAL SECURITY WOULD BE ENHANCED: AND THE LONG SERVICE PAYMENT SCHEME UNDER THE EMPLOYMENT ORDINANCE WOULD BE EXTENDED. THE GOVERNMENT POSITION HAS REMAIN

UNCHANGED.

3.

LINES

WE SUGGEST THE REPLY TO NALGO BE MADE ALONG THE FOLLOWING

''THE HONG KONG GOVERNMENT SUPPORTS THE IDEA OF PROVIDING

FOR SECURITY IN OLD AGE. THIS IS BEING DONE IN THREE

WAYS

-

(A)

ENHANCING SOCIAL WELFARE PROVISIONS FOR THE ELDERLY:

(B)

EXTENDING THE LONG SERVICE PAYMENT SCHEME

PROVIDED UNDER THE EMPLOYMENT ORDINANCE: AND

1

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