Counter-proposal on pension scheme
THE Liberal Party has unveiled a counter-proposal to the Government's proposed old-age pension scheme which includes the introduction of a compulsory provident fund.
The two-pronged plan would require employers and employees each to contribute five per cent of the employee's salary into a provident fund.
It would also increase old-age benefits under the Comprehensive Social Security Assistance scheme to cater for the most needy.
The party planned to submit the proposal to the Government and the Preliminary Working Committee (PWC) for consideration.
Party spokesman James Tien Pei-chun, a legislator, said the Liberals' plan would be more economically viable than the Government's.
He criticised the Government's scheme as an economic 'time bomb'.
In years to come, Hong Kong's decreasing number of workers would find it more and more difficult to support its ageing population, he said.
According to the Government's scheme, employees with a monthly income of more than $4,000 would be required to contribute with their employers a total of three per cent of their salary to a fund.
The fund would then be used to pay a $2,300 monthly allowance to all Hong Kong residents aged over 65.
'The pay-as-you-go system under the scheme has failed in many countries and has been criticised by the World Bank and prominent economists,' Mr Tien said.
He said the party proposed that under its plan stringent laws would be introduced to govern the management of the provident fund.
There would also be a compensation scheme to provide protection against fraud or theft from the fund.
Mr Tien said that while the Liberal Party's proposal dealt with some of the concerns expressed by Chinese officials, this was not the party's main reason for putting the scheme forward.
He added that the party would launch a campaign to promote the recommendations and would conduct an opinion poll.
Public consultation for the Government's old-age pension scheme closes at the end of this month.