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Re attached memo from SCS.
Apart from the Civil Service, there are practical- ly no pension schemes in Hong Kong. 99.99% of retirement schemes provide a lump sum cash benefit when the employee leaves service. The only pension scheme known to us is the Hang Seng Bank scheme which is dated back to the 1930s and now accommodates only a very small number of members who refused to transfer to a new scheme of the Bank. There is no currency protection clause in this pension scheme.
3.
As regards the lump sum retirement schemes, all schemes established in recent years have incorporated "emergency clauses" into the scheme deed. Those which -were established many years ago have also amended their deed to incorporate such clauses. Typically, such a retirement scheme provides for payments to
be made in Hong Kong dollars in Hong Kong but in special circumstances payments may be made outside Hong Kong or in a currency other than Hong Kong dollars. A typical clause describing the special circumstances
is attached at Annex A.
Those schemes which are grounded on trust also have "emergency clauses" incorporated in the trust deed to provide for the immediate replacement of the trustee by an alternate trustee.
A typical clause for the appointment of alternate trustee is attached at Annex B.
5.
The provisions referred to in paras 3 and 4 arise mainly from fears about the operation of the government post 1997, and are designed to preserve the assets of a scheme from government intervention.
In that sense, they enhance the security of retirement benefits. It is not clear to me, however,
however, whether these provisions, in particular the ones referred to in para 3, have the effect of protecting scheme members against currency depreciation.
6.
Insurers in retirement scheme business do provide a class of policy which enables Hong Kong dollars to be switched to other currencies at short notice.
This definitely protects the scheme members from currency depreciation.
I understand that this class of However, I understand that
most employers and employees are emergency clauses referred to in
policy is rarely used; happy to rely on the paras 3 and 4 above.
and and are switched as well
as
entitlements
to ow (ow Grodlad's
enquiry)
Lay
356
G. F. 82
CONFIDENTIAL
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