THE Government's revised pension scheme could result in a $40 billion annual windfall for the local fund management industry, according to preliminary estimates.
It also could add $20 billion to the total annual wage bill of about 630,000 businesses and involve a fourfold increase in the number of bureaucrats responsible for administering the scheme's vast income.
The proposal unveiled yesterday represents a turn-around from the position the Government advocated until two months ago, when it finally scuppered plans for a universal pension scheme.
To defeat its battle-hardened opposition in the Legislative Council and in industry, the Government will need quick answers to those questions not addressed in yesterday's skeletal outline.
The Government has switched from a 'defined benefit' scheme - where pensioners knew they would receive a monthly payout of about $2,300 - to a 'defined contribution' plan where employers and workers will pay a set amount into the scheme without any assurance as to the return.
Assuming Hong Kong's average employee earns about $10,000 a month and there is a combined employer-employee contribution of about 10 per cent, the scheme will generate between $30 billion and $40 billion in accrued benefits each year.
