Administration's Assessment
- 13 ·
20.
Affairs
made by
Civil Service Branch, Finance Branch and Monetary
Branch have carefully examined the recommendations
the consultant but have concluded that none of them .
can be supported.
21.
The
50% of the
proposal for Government to require that at least
assets of private sector occupational retirement
schemes be held in HK dollars would be criticized as a form
of exchange control and as a crude attempt by Government to
benefits at the expense of private
protect civil servants'
sector employees.
22.
Even if the funding
problems
associated with a
hypothecated pension scheme could be resolved, it would be
difficult to achieve over the years an average rate of return
higher than the cost of borrowing long term money. This led
the consultant to propose that Government should provide an
guarantee to cover interest rate risks on
interest rate.
borrowing (in HK dollars) exceeding the yield on investments
(in foreign
currency).
amount to a Government
An interest rate guarantee would
subsidy of the scheme and cannot be
supported.
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