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SCMP Reporter

The Government appears set to resist a co-ordinated campaign by the financial services industry and employers to have it lift tough conditions on the sale of pension schemes.

 Industry officials plan a lobbying campaign aimed at having the controversial October 15, 1995 deadline for Mandatory Provident Fund (MPF) exemption lifted.

 They say that sales of pension schemes under the Occupational Retirement Schemes Ordinance (Orso) have fallen by up to 40 per cent from 1995's highs because of widespread uncertainty about the interface between such schemes and the proposed MPF.

 They say that the indefinite delays to the legislation to establish the MPF have swept away one of the key reasons for the October 15 cut-off date.

 However, MPF Office director, Pamela Tan Kam Mi-wah, said she was adamant the current arrangement would remain in place.

 Ms Tan said compromises would cause additional delays to the legislation and slow introduction of the MPF.

 She remains confident the fund will be introduced and says Orso sales have maintained a steady - if unspectacular - pace.

 A broad coalition of the financial services industry and employer groups are planning to launch a co-ordinated campaign to have the deadline dropped.

 According to a leaked copy of a letter to be sent to a Legislative Council sub-committee on the MPF, the cut-off date for MPF exemption was tolerated by the industry on the basis that MPF was imminent.

 The letter states: 'As this is no longer the case, we request this date to be removed and replaced with the eventual enactment date of the subsidiary legislation.

 'With a revised date for the passing of the legislation no longer in sight, it is important that the market is restored to some certainty over their retirement plan arrangements and encouraged to provide plans now for their employees.'  It also says that there is concern that the MPF Office has 'asked for much support but has delivered little in return to support the industry as a whole'.

 The MPF office has argued that removal of the date will encourage unscrupulous employers to set up plans that are below minimum MPF arrangements.

 The letter states: 'Our opinion is that this is totally unfounded.

 'This legislation provides that members have a choice of Orso or MPF schemes as this will allow employees to choose an MPF scheme if their Orso plan has poor provisions.' 



Government aims to stand firm on pension plan conditions